New Estimates Challenge Assumptions About Lost Gulf Oil Supply
Traders now say the loss of oil supply from the Strait of Hormuz closure may be much smaller than initial estimates of over 10 million barrels per day, challenging earlier assumptions.
New estimates from traders are challenging earlier assumptions about the amount of oil supply lost due to the closure of the Strait of Hormuz. Following US and Israeli strikes on Iran that prompted Tehran to shut the strategic waterway, initial reports suggested a loss of over 10 million barrels per day (bpd). However, traders now indicate that the actual disruption may be significantly smaller as alternative logistics have strengthened.
For oil and gas traders, this revision has immediate implications for supply-demand balances and price expectations. The Strait of Hormuz is a critical chokepoint for global crude flows, and a prolonged closure would typically tighten markets. But if the supply loss is smaller than feared, the risk premium embedded in crude prices could unwind. Live fuel prices and charts on NowPrice show how the market is reacting to these shifting supply estimates, with volatility expected to remain elevated.
Looking ahead, traders will focus on actual flow data from satellite tracking and port reports to confirm the revised estimates. Any further escalation or de-escalation in the region could quickly alter the supply picture. The market is also watching for potential releases from strategic reserves or diplomatic efforts to reopen the strait, which would further pressure prices.