Iran (IMNA) - Unlike past shocks caused by wars or embargoes, the blockage directly targets the world’s most critical energy logistics chokepoint. The Kepler Institute’s fresh assessment warns that a continued halt to oil tanker transit through the strait until the end of April 2026 could push the global energy market into an extraordinary crisis. As of April 12, roughly 300 million barrels had already been removed from the supply chain. The strait normally carries approximately 20% of the world’s daily oil demand.
In response, Brent crude oil prices have surpassed $100 per barrel, while refined products such as jet fuel have risen above $200 per barrel. This price surge has triggered demand destruction, prompting airlines to cancel numerous flight routes, consumer countries to impose fuel rationing and mandatory remote work, and the International Energy Agency to revise downward its 2026 oil demand growth forecast.
Saudi Arabia has leveraged the full capacity of its East-West pipeline, and the United Arab Emirates has utilized the Fujairah export route in an attempt to offset part of the supply shortfall. In contrast, Iraq has been largely incapacitated, with its exports collapsing from 4 million to less than 900,000 barrels per day. Kepler cautioned that without immediate diplomatic intervention, smaller Persian Gulf states may soon follow Iraq into paralysis.
The institute further cautioned that even if the crisis is resolved immediately, market recovery will not be swift, and the volume of lost oil could reach one billion barrels before the supply chain is fully restored.
Two potential paths lie ahead. In the favorable scenario, limited demand contraction and a gradual easing of the crisis over the next several weeks are anticipated. In the unfavorable scenario, continued disruption into the third quarter of the year could push oil prices toward $190 per barrel and cause demand destruction on the order of several million barrels per day — an outcome that would be even more severe than the oil crisis of the 1970s.
For now, the world watches and braces, hoping that cooler heads prevail before the pumps run dry.
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