Strait of Hormuz Oil Transit Collapse and the Global Supply Response
The war that began in the Middle East on 28 February 2026 has produced what the International Energy Agency describes as the largest supply disruption in the history of the global oil market. Within days of the outbreak of hostilities, tanker traffic through the Strait of Hormuz, the narrow passage linking the Persian Gulf to the Gulf of Oman and the Arabian Sea, fell sharply. Flows that had averaged around 20 million barrels per day prior to the conflict collapsed to an average of 2.7 million barrels per day across March, April and May.
Cumulative oil supply losses from Middle East producers now exceed 1.3 billion barrels. Those figures, published by the IEA in its mid-June assessment of how markets readjusted, define the scale of the shock that Transition Economics Institute and its partners must interpret for energy security planning. The strategic weight of the Strait was already well established before the fighting began. In 2025 an average of 20 million barrels per day of crude oil and oil products shipped through Hormuz, equal to around 25 per cent of world seaborne oil trade.
As the crisis intensified in early April, the North Sea Dated international crude oil benchmark reached an all time high of 144 United States dollars per barrel, more than double its pre war levels. Prices later eased as demand fell and as optimism grew that a deal might restore more regular shipping. On average, global oil inventories fell by 3.8 million barrels per day from the start of the conflict. Within two weeks of the start of the conflict, IEA Member countries unanimously agreed to carry out the Agency’s largest ever release of emergency oil stocks, amounting to 400 million barrels.
The third adjustment came from producers and trade routes outside the blocked waterway. Saudi Arabia rapidly increased crude flows through its East West pipeline for export via the Red Sea port of Yanbu. Oil exports from Yanbu rose from 2 million barrels per day before the war to more than 5 million barrels per day in early June. The largest gains came from the United States, alongside increases from Kazakhstan, Brazil and Venezuela. The IEA commentary of 22 June 2026 framed these responses as the reason markets avoided far more severe demand impacts.
Stock draws, bypass routes, non Gulf supply growth and refining flexibility all worked together. For Transition Economics Institute, several policy conclusions follow directly from the verified record. Track one is continuous verification of Hormuz clearance and bypass utilisation against IEA and commercial flow data, without extrapolating beyond published figures. The Hormuz shock of early 2026 will leave lasting marks on investment, trade partners, supply routes and fuel choices.