The paralysis of oil and gas flows out of the Gulf will have a deepening impact in coming weeks as existing stocks are drawn down, according to industry executives and analysts.
Supplies are now down from about 20 million barrels a day before the conflict — and the closure of the Strait of Hormuz — to close to one billion barrels a day in April, maritime intelligence group Kpler said Friday.
“While a gradual recovery may begin from June, the rebalancing is incomplete, leaving the global oil market tighter and increasingly reliant on inventories and demand adjustment,” Kpler said.
One of the US oil executives who met with US President Donald Trump Thursday says the market has not absorbed the full impact of the disruption.
“There’s more to come if the strait remains closed,” Exxon’s CEO Darren Woods told shareholders Friday.
Disruption to supply had been mitigated by the large number of loaded oil tankers that were in transit during the first month of the war, the release of strategic petroleum reserves by governments and tapping into inventories, Woods said.
Analysts say that buffer is now depleted. According to the US Energy Information Administration, US gasoline stocks fell to 222 million barrels on April 24, their lowest for this time of year in more than a decade.
In recent days there have been just a handful of crossings through Hormuz, according to Kpler and other shipping data sources.
The UK Navy said Friday that “Hormuz traffic has collapsed by 90% since conflict began, with fewer than 10 ships a day now transiting the strait,” and some 20,000 sailors stranded on ships in the Gulf.
Some context: Trump said Friday there were options in addition to the ongoing US blockade of ships using Iranian ports.
Iran has shown no willingness to compromise on the control over Hormuz that it asserted when the conflict began.
“The new management of the Persian Gulf will be implemented under the command of the Supreme Leader of the Revolution,” reported the semi-official Iranian news agency Tasnim.