Strait of Hormuz closure pushes global oil stocks toward record lows

Brent crude is trading at $87.55 a barrel—the lowest level since before the Hormuz shutdown—while the International Energy Agency calls the disruption “the largest supply shock in the history of the global oil market”【1】. The market’s buffer is eroding, and analysts say oil inventories could reach operationally critical levels if the strait stays closed.

Scale of the disruption

The strait, which normally carries about 20 million barrels a day, has seen traffic fall to roughly five days’ worth of oil over more than a month, a 95 % plunge in crude shipments and a 99 % drop in LNG carrier movements【1】. The International Energy Agency labels this the biggest supply interruption ever recorded, yet Brent remains at $87.55, far below the $150‑plus levels some forecasts warn could materialise if the blockage persists【2】.

Buffers and looming inventory crunch

China’s strategic reserves, roughly 1.3 billion barrels, are being drawn down at about 1 million barrels a day, while its demand fell from 12.5 million to 7 million barrels per day between December and the summer months【1】. The United States, Brazil and Canada have stepped in, but analysts say global oil stocks are approaching “operationally critical” levels, where additional supply must be found to avoid a sharp price spike【1】.

Outlook for supply recovery

Restart timelines for fields shut down for two months range from ten weeks to seven months, and more than 80 energy facilities damaged in the region could take up to two years to fully recover, according to IEA executive director Fatih Birol【1】. The UAE’s national oil company even projects that full Hormuz flows may not resume until 2027【1】. If the strait reopens while large volumes of oil re‑enter the market, some analysts warn prices could tumble to $50 a barrel, underscoring the volatility of the situation【1】.

What to watch

• IEA monthly oil supply report – any revision to the estimated size of the global oil stockpile.
• U.S. crude inventories – weekly EIA data for signs of a sharp drawdown that could trigger price moves.
• Geopolitical developments – any de‑escalation or escalation that could alter shipping routes through Hormuz.

The Hormuz closure has already forced the market to rely on unprecedented buffers, and the trajectory of global oil inventories will determine whether prices stay modest or surge toward the $150‑per‑barrel scenarios warned by analysts. The coming weeks will reveal how quickly alternative supply can fill the gap and whether the market can avoid a new inflationary shock.