Hormuz Disruptions Spark Extreme Volatility in Crude Oil Market

The crude oil market has been extremely volatile in 2026 due to several interrelated risks converging at once. These include severe disruptions to the Strait of Hormuz, Middle East production outages, low inventories, high refinery utilization, sanctions, and geopolitical escalation.

EIA estimates that oil flows through Hormuz fell from approximately 21.6 million barrels per day in Q4 2025 to just 4.9 million b/d in Q2 2026, making it one of the world's most important energy chokepoints.

Volatility has been extreme, with front-month Brent trading as high as $118 per barrel on April 29 and falling as low as $72 on June 26 during Q2 2026. The EIA forecast sees average Brent near $85 per barrel in Q3 2026, followed by an average around $69 in 2027.