NEW YORK (Realist English). Nearly four months of the Strait of Hormuz blockade have led to colossal losses in the global oil market. According to analytics company Kpler, during the conflict the world lost 1.15 billion barrels of oil supplies from the Middle East. Although the signing of the memorandum between the US and Iran has reopened the strategic strait, experts warn: this may have come too late.
Scale of losses: from 1 to 2 billion barrels
According to estimates by Norwegian consulting firm Rystad Energy, the conflict has already removed 1 billion barrels of oil from world markets in just three months – equivalent to nearly 2.5 US strategic petroleum reserves. Even under the baseline scenario, total losses could almost double by the end of the year, reaching 2 billion barrels.
Production in six Gulf countries fell from 24.2 million to 12.4 million barrels per day. Saudi Arabia lost 3.8 million barrels per day, Iraq – 2.8 million, Kuwait – 2 million. Iraqi oil export revenues collapsed from $6.8 billion in February to $1 billion in April.
Shell CEO Wael Sawan described the situation as a “nearly billion‑barrel hole” that deepens every day. In his view, the road to recovery will be long.
Inventories at critical minimum
Global oil storage is depleted to the limit. The International Energy Agency’s strategic reserves are at their lowest level since 1990. The US Strategic Petroleum Reserve is at a 43‑year low. Commercial inventories have reached operational stress levels.
The critical oil hub in Cushing, Oklahoma, through which fuel is supplied across America, has reached operational minimum. Analysts compare this to a situation “when the coffee drops below the spout and you have to tilt the vessel to get the last grounds.” At the bottom of the tanks, unusable sediment accumulates, making it difficult to maintain pressure in pipelines.
President Donald Trump warned at the G7 summit in Versailles: “We will run out of reserves in about four weeks.” According to him, if the strait had not been opened, the world would have faced an “economic catastrophe” comparable to the Great Depression of Herbert Hoover’s time.
The road to normalisation will take months
Opening the strait will not solve the problem instantly. Normalising supplies requires:
- Demining of the strait’s waters
- Return of empty tankers to the region
- Restart of oil fields, some of which may have become unusable
According to Chevron and Exxon Mobil estimates, the process will take from several weeks to two months. Rystad Energy forecasts that only 10–15% of lost production will return to the market in the first month, and full recovery could stretch until 2027.
The market underestimates the risks
Despite falling prices – Brent dropped from a peak of $126 to $80 a barrel – many analysts believe the market is getting ahead of itself. “Everyone is saying: ‘It’s over!’ But restoring logistics is a huge problem,” said Helima Croft, head of global commodity strategy at RBC Capital Markets.
Halliburton CEO Jeffrey Miller noted that “restoring production and inventories will not be a quick or simple process.” Analysts warn that once the euphoria over the opening of the strait subsides, fundamental market factors will again push prices higher.
Global oil prices are showing their most significant weekly decline in months. Over five trading sessions, Brent lost about 9%, falling to $80.38 a barrel, and WTI – nearly 10%, to $77.54. However, behind these figures lies not a market victory over geopolitics, but a disturbing illusion of normalisation: physical supplies have not recovered, and Iran is already using the truce to consolidate control over the strategic strait.
The week that deceived the market
The main driver of the decline was the signing of the memorandum between Washington and Tehran on June 17. The market took this as a signal for the imminent return to the market of more than 85 million barrels of oil stuck in the Gulf region. On Thursday, three Saudi vessels carrying 6 million barrels passed through the strait. Kuwait announced its intention to increase production from 500,000 to 2 million barrels per day within a week.
However, these isolated signals do not change the main point: the strait is not functioning as before. According to MarineTraffic, only a few vessels have passed through the strait, and full restoration of shipping, according to experts, will take months.
Iran does not let go of the strait
While traders celebrated the “opening,” Tehran began tightening the screws. Iranian state media announced that all vessels must coordinate passage with the naval forces of the Islamic Revolutionary Guard Corps. Iran’s Persian Gulf Authority stated: “No vessel may pass through the Strait of Hormuz without a valid permit.”
As analysts note, “the market had priced in the agreement and its relatively smooth implementation, and it seems that is not what we are getting so far.” The US‑Iran talks in Switzerland, scheduled for Friday, were postponed, adding to uncertainty.
Israel bombs, the market is nervous
Israel continues its military operation against Hezbollah in Lebanon, despite a formal ceasefire. US Vice President JD Vance acknowledged that violations are possible. Tehran, which backs Hezbollah, made it clear: any Israeli attacks on Lebanon are seen as a violation of the memorandum.
Banks revise forecasts, but diverge sharply
Investment banks have sharply revised their forecasts following the news of the deal:
- Goldman Sachs lowered its Brent forecast for the fourth quarter of 2026 to $80 from $90, and for 2027 to $75 from $80.
- Citi was the most bearish: Brent in Q3 2026 – $75, in Q4 – $70, and in 2027 – $65.
- Morgan Stanley also cut its forecasts.
- Barclays maintains its forecast of $100 per barrel for Brent in 2026, pointing out that the effect of the opening of the strait will not be felt soon.
Analysts warn that the futures market “is already trading as if supply chains have normalised.” In the physical sector, tensions persist: inventories in Cushing, Oklahoma, have fallen to 20 million barrels – an operational minimum. The refining margin (crack spread) remains high – about $35 a barrel, well above the five‑year average.
Technical picture: oversold zone
According to VT Markets, support levels for WTI are at $75 and $74, for Brent – $78–78.50 and $76. Resistance for WTI – $77, then $78–78.50 and $80; for Brent – $80 and $82.50–83. Stoch RSI is in the oversold zone, indicating a possible technical rebound.
Uncertainty remains
VT Markets analysts believe the sell‑off was excessive: “We consider the recent sell‑off to be excessive.” However, even under an optimistic scenario, the return of flows to pre‑war levels will take months, not weeks. Demining, redeployment of tankers, and restarting fields – a process that could stretch into 2027.
The market is pricing in a rapid normalisation, but reality is proving more complex. Once the euphoria over the opening of the strait subsides, fundamental factors – depleted stocks and lingering geopolitical uncertainty – may again push prices higher.
