Strait of Hormuz oil trade collapses as Iran war disrupts supply

Six months into the US-Iran conflict, maritime traffic through the Strait of Hormuz has fallen by as much as 90%, down to about 2–9 million barrels per day (bpd) from a typical 18–21 million bpd. This chokepoint normally supplies roughly 20% of the world’s crude and refined products, but the Strait of Hormuz is now operating at a small fraction of capacity. Middle Eastern exports are cut roughly in half, averaging about 9.5 million bpd versus nearly double in 2025. Iran is hit hardest: its crude exports drop by about 90% to roughly 260,000–300,000 bpd, driven by a US naval blockade and sustained threats to commercial shipping. Before the escalation in late February 2026, 130–140 vessels transited daily; estimates now show only single digits on some days. The disruption is linked to attacks on shipping, the US blockade, and instability on alternate routes such as Bab el-Mandeb. Brent crude has climbed from roughly $70–$77 pre-war to about $85–$94. Oil markets are trying to adapt via pipeline rerouting, inventory drawdowns, and limited use of “dark” shipping, while regional exports are redirected through Red Sea and Fujairah routes. However, refined products (e.g., diesel and jet fuel) are harder to reroute, and global refined inventories are declining, pushing prices higher. Sustained Brent above $85 complicates central-bank decisions amid sticky inflation. Risk is mixed for equities: energy producers outside the conflict zone may benefit, while refiners dependent on Middle Eastern crude face margin pressure. Net oil-importing countries in South Asia and parts of Africa see currency weakness and increased demand for dollar-denominated stablecoins. For traders, the Strait of Hormuz disruption adds macro volatility and can reinforce USD liquidity preferences in the crypto market.