Hormuz Crisis Disrupts 18.4 Million Barrels of Daily Oil Supply

The closure of the Strait of Hormuz following the US-Israel war with Iran has cut off roughly 18.4 million barrels per day of oil and 110 billion cubic metres of annual LNG trade, according to a May 2026 analysis by the Energy Transitions Commission. The shock has pushed Brent crude above $100 per barrel and Asian LNG prices above $25 per MMBtu, exposing deep structural vulnerabilities in fossil-fuel dependent energy systems.

The Energy Transitions Commission report estimates net oil supply has fallen by around 11 million barrels per day after emergency offsets, with the International Energy Agency recording a realised supply fall of about eight million barrels per day in March alone — nearly double peak losses during the 1973 Arab oil embargo. The crisis affects 30 per cent of globally traded fertiliser inputs and has forced emergency measures ranging from fuel caps to shortened work weeks across Sri Lanka, Pakistan, Bangladesh, India and the Philippines. India's strategic reserves cover only around 10 days of demand.

The report identifies the crisis as the largest energy disruption in recorded history, with IEA executive director Fatih Birol describing it as such. Around 84 per cent of crude oil and more than 80 per cent of LNG through Hormuz is destined for Asian markets, making the region acutely exposed. The European Union faces additional pressure, with President von der Leyen warning the conflict is costing the bloc nearly €500 million per day. Coal prices have also surged, with Newcastle coal rising from $114 per tonne in February to around $132 per tonne in recent trades.

The Energy Transitions Commission argues that accelerating renewable energy, electric vehicles, heat pumps and battery storage would structurally reduce exposure to fossil fuel market shocks. By 2035, clean energy measures could displace more than 20 per cent of global oil and gas demand — equivalent to all exports currently moving through Hormuz. Current world fossil fuel spending stands at around $4 trillion annually, and the commission estimates an additional $1 trillion to $2 trillion in costs this year alone if elevated prices persist. Achieving net zero would require around $3.5 trillion per year in clean energy investment through 2050.

Key figure — 18.4 million barrels per day