IEA Flags Historic Oil Supply Shock as Hormuz Flows Collapse 81% Since February

The International Energy Agency sounded its starkest alarm of the conflict on Tuesday, describing the Strait of Hormuz disruption as potentially the largest supply shock in the history of the oil market. Tanker flows through the strait have collapsed from 20 million barrels per day in February to just 3.8 million bpd in early April — an 81% reduction — as the US-Iran conflict effectively shut the most critical chokepoint in global energy trade. Global oil supply fell 10.1 million barrels per day to 97 mb/d in March, the IEA said, marking an unprecedented single-month drawdown.\n\nBrent crude edged lower to $90.92 per barrel on Wednesday morning, down 0.40% on the session, as markets priced a slightly higher probability of resumed US-Iran talks following Tuesday's diplomatic signals from Washington. The current level sits well below the $120-plus spikes registered immediately after the initial ceasefire breakdown, reflecting diplomatic optionality — not any underlying restoration of supply flows.\n\nAnalyst Divergence on the Path Forward\n\nGoldman Sachs warns that if the Strait remains mostly shut for another month, Brent will average above $100 per barrel through the remainder of 2026. ANZ Research is marginally more constructive, forecasting Brent above $90 this year before finishing at $88 — contingent on a partial reopening of the strait. UBS has separately raised its Brent price forecast, citing structural disruption that cannot be quickly unwound even if a diplomatic deal is secured.\n\nOPEC+ Output Increase Meets Reality\n\nEight OPEC+ members nominally raised production by 206 thousand barrels per day in April, part of the scheduled unwind of additional voluntary cuts agreed last year. In practice, four of the six GCC producers face severely constrained export routes through the very strait they normally dominate. Saudi Arabia has partially offset this by restoring its East-West pipeline to full operational capacity, enabling it to route approximately 7 million barrels per day to Red Sea terminals and bypass Hormuz entirely — meaningful headroom, but insufficient to offset the full scale of the disruption.