Hormuz Disruption Could Trigger Oil Supply Loss of 13-14 Million Barrels Per Day
Barclays analysts warn that a prolonged closure of the Strait of Hormuz could lead to a significant loss in oil supply, with the bank estimating a disruption of around 13-14 million barrels per day. This would account for roughly one-fifth of global oil and liquefied natural gas supplies.
The Strait is currently blocked by Iran, causing crude oil prices to rise above $100 a barrel. Oil prices climbed over 2% on Thursday, with Brent futures trading at $104.36 a barrel by 0647 GMT, while U.S. West Texas Intermediate crude futures were at $92.23 a barrel.
According to Barclays, if disruptions persist until the end of April, Brent forwards could reprice to $100 per barrel, and in a more prolonged scenario stretching to the end of May, prices could rise to $110. The bank also notes that supply elasticity is structurally weaker than in past shocks, with OPEC+ spare capacity under-delivering and non-OPEC+ growth decelerating due to years of under-investment.
While there are uncertainties around the duration of the disruption, Barclays expects traffic through the Strait to normalize by early April. In its base case scenario, the bank forecasts Brent averaging $85/b in 2026.