Global oil prices remain insufficiently high to fully reflect the depth of the massive supply crisis that has arisen due to the war in Iran and the effective closure of the Strait of Hormuz. The restrictions on transportation through this strategic maritime route have led to a significant reduction in oil volumes in the global market.
This is reported by Finway
Loss of Supply Volumes and Analysts’ Forecasts
At the FT Commodities Global Summit in Lausanne, Saad Rahim, the chief economist of Trafigura Group, stated that approximately one billion barrels of oil have already been lost since the onset of the conflict in the Middle East. If the war continues, this figure could rise to 1.5 billion barrels. Meanwhile, Frédéric Lasser, head of analysis at Gunvor Group, emphasized that if hostilities continue for another month, oil markets could “hit bottom,” meaning oil reserves would be depleted.
Brent crude oil futures have been characterized by significant volatility since the start of the war in Iran: the price rose to nearly $120 per barrel but later fell amid expectations of peace negotiations between the U.S. and Iran. As of April 21, a barrel of Brent was trading at around $95, attributed to hopes for a swift resolution of the conflict.
“The scale seems such that the market really cannot grasp it. It will take time to return supplies to normal levels if a peace agreement is reached, so there is currently a real gap between perception and reality,” Rahim believes.
Long-Term Consequences for Oil Supply
Amrita Sen, director of research at Energy Aspects, noted that oil supplies through the Strait of Hormuz are unlikely to ever return to pre-war levels. According to her estimates, losses of oil products, including gasoline, could reach 450 million barrels. This forecast is based on the assumption that even if there is a partial resumption of traffic through the Strait of Hormuz next month, volumes will not exceed 50% of pre-war levels.
Recent agreements between the U.S., Israel, and Iran include a two-week mutual ceasefire and the opening of a passage for commercial vessels through the Strait of Hormuz. These steps aim to partially stabilize the situation in energy markets.
Previous hostilities included joint strikes by the U.S. and Israel on strategic facilities in Iran, after which Iran retaliated by attacking American bases in Gulf countries, including Kuwait, the UAE, Qatar, Bahrain, and Jordan.