Strait of Hormuz shutdown reshapes global oil supplies and market prices

Between March and May the closure of the Strait of Hormuz cut daily crude exports from about 20 million barrels to just 2.7 million, marking the largest supply interruption since the February 28 Middle‑East conflict and costing over 1.3 billion barrels. The market avoided a collapse because a pre‑existing global surplus—projected at 3.7 million barrels per day by 2026—and stockpiles of roughly 8.2 billion barrels provided a buffer. China’s earlier over‑purchasing helped create this cushion. The International Energy Agency unlocked an unprecedented 400 million barrels from emergency reserves within two weeks, while private inventories were drawn down at a record rate of about 3.8 million barrels daily. Alternative export routes and rapid refinery adjustments further mitigated the shock. Brent settled near $72 a barrel on July 3, while the Dow Jones hit a record high, and U.S. payroll data kept expectations of Fed rate hikes low, supporting precious‑metal prices.