Oil Prices Spike as Iran War Enters Prolonged Crisis Mode

Global oil traders are bracing for an extended period of oil and LNG squeezes as hopes of resolving the Iran war dwindle. The International Energy Agency (IEA) expects global oil supply to fall by 4.3 million barrels per day this year, leading to a deeper energy crunch.

The Strait of Hormuz, a critical chokepoint for oil flows, has seen traffic reduced to just 11% of pre-war levels, averaging around 2 million barrels daily. Before the conflict, global oil demand and baseline supply hovered around 103 million barrels per day.

Economists warn that Brent crude prices do not accurately reflect the crisis, which is more severe in fuels than it appears. With no end to the war in sight, analysts expect a persistent daily supply deficit of about 4-5 million bpd, offset by emergency stock releases and reduced demand.