The war that began in the Middle East on 28 February 2026 has produced what the International Energy Agency describes as the largest supply disruption in the history of the global oil market. Within days of the outbreak of hostilities, tanker traffic through the Strait of Hormuz, the narrow passage linking the Persian Gulf to the Gulf of Oman and the Arabian Sea, fell sharply. Flows that had averaged around 20 million barrels per day prior to the conflict collapsed to an average of 2.7 million barrels per day across March, April and May. Cumulative oil supply losses from Middle East producers now exceed 1.3 billion barrels. Those figures, published by the IEA in its mid-June assessment of how markets readjusted, define the scale of the shock that Transition Economics Institute and its partners must interpret for energy security planning.
This article sets out what the verified IEA record shows about the oil transit collapse, the buffers that absorbed the first wave of losses, and the supply side responses that prevented an even more severe demand shock. The figures are those published by the IEA on the Hormuz shock and the wider Middle East energy market.
The strategic weight of the Strait was already well established before the fighting began. In 2025 an average of 20 million barrels per day of crude oil and oil products shipped through Hormuz, equal to around 25 per cent of world seaborne oil trade. About 80 per cent of that oil was destined for Asia. Options to bypass the waterway were limited. Only Saudi Arabia and the United Arab Emirates held operational crude pipelines that could potentially reroute flows, with an estimated 3.5 to 5.5 million barrels per day of available capacity. Iran, Iraq, Kuwait, Qatar and Bahrain relied on the Strait for the vast majority of their oil exports. On the gas side, about 20 per cent of the world’s liquefied natural gas moved through the Strait in 2025, stranding Qatar and UAE exports when transit became unsafe. Those structural facts explain why a near closure of Hormuz transmitted so quickly into global oil balances and prices.
As the crisis intensified in early April, the North Sea Dated international crude oil benchmark reached an all time high of 144 United States dollars per barrel, more than double its pre war levels. Even steeper gains were recorded for jet fuel and diesel. Prices later eased as demand fell and as optimism grew that a deal might restore more regular shipping. The IEA’s Oil Market Report estimated that global oil demand would drop by almost 5 million barrels per day in the second quarter of 2026 year on year, and by 1.1 million barrels per day on average for the full year. That compared with the February forecast, issued before hostilities began, of global demand growth of 850 000 barrels per day for the full year. Demand destruction was real, yet it still fell short of the volume of oil that stopped moving through the Strait. Other adjustments therefore mattered.
The first adjustment was stock drawdown. On average, global oil inventories fell by 3.8 million barrels per day from the start of the conflict. Markets entered the crisis with a cushion. In February the IEA’s balances pointed to a surplus of 3.7 million barrels a day for 2026 as a whole. Global oil supply had been running ahead of demand for twelve months, and oil in storage had reached 8.2 billion barrels. China, which had been accumulating imports for many months, cut crude oil imports by 40 per cent, or 4.6 million barrels per day, between February and May. That reduction, together with lower refining and end use demand inside China, eased wider market pressure even as Hormuz volumes collapsed.
The second adjustment was the IEA’s emergency stock release. Within two weeks of the start of the conflict, IEA Member countries unanimously agreed to carry out the Agency’s largest ever release of emergency oil stocks, amounting to 400 million barrels. The release ramped up steadily. In May the collective action was bringing 2.5 million barrels per day of additional oil to market. Asia Pacific members moved first to address immediate regional strain; other regions followed. The IEA Executive Director stressed repeatedly that emergency stocks are a short term countermeasure, not a lasting solution, and that the single most important remedy remains the full and unconditional reopening of the Strait to regular shipping.
The third adjustment came from producers and trade routes outside the blocked waterway. Saudi Arabia rapidly increased crude flows through its East West pipeline for export via the Red Sea port of Yanbu. Oil exports from Yanbu rose from 2 million barrels per day before the war to more than 5 million barrels per day in early June. The UAE drew on storage, the Habshan to Fujairah pipeline that bypasses Hormuz, and alternative shipping along the Omani coastline. The Habshan Fujairah line enables exports of 1.8 million barrels of crude a day. The 42 million barrel Mandous underground storage complex near Fujairah added flexibility. UAE total oil exports rose to 4.3 million barrels per day in early June from 1.9 million in March, reaching almost 85 per cent of pre war levels. Together, Saudi and UAE bypass capacity of roughly 3.5 to 5.5 million barrels per day, as estimated on IEA Hormuz materials, formed the structural ceiling on how much Gulf crude could avoid the Strait entirely.
Outside the Gulf, Atlantic Basin suppliers expanded shipments to Asia. The largest gains came from the United States, alongside increases from Kazakhstan, Brazil and Venezuela. Total crude and petroleum product exports from the United States surged to a record high of 13.1 million barrels per day in May, up by nearly a quarter from the same month a year earlier. Higher production and draws on industry and government stocks underpinned that surge. Refiners also adapted. The Middle East had been the world’s largest source of aviation fuel to international markets in 2025, so the effective closure of Hormuz removed a large share of jet fuel supply. United States refiners produced record amounts of aviation fuel. European jet fuel yields rose to a record high. West African jet fuel exports nearly doubled relative to the preceding three month average, driven largely by Nigeria’s Dangote refinery. Europe’s jet fuel demand was rising towards a summer peak of 1.8 million barrels per day, so sustained high European yields remained necessary to avoid excessively tight conditions.
The IEA commentary of 22 June 2026 framed these responses as the reason markets avoided far more severe demand impacts. Stock draws, bypass routes, non Gulf supply growth and refining flexibility all worked together. Yet the same analysis warned that levers for increasing supply had dwindled and that global oil stocks were depleting at a record pace just ahead of peak summer demand. Without a full reopening of Hormuz, markets risked entering what the IEA Executive Director called a red zone in July and August. A new agreement between the United States and Iran in mid June, aimed at reopening the Strait and providing a foundation for lasting peace, arrived against that backdrop, with early signs of rising exports after the deal was agreed. The situation nonetheless remained highly unpredictable, with major strains in large parts of the market and uncertainty over how peace talks would play out.
For Transition Economics Institute, several policy conclusions follow directly from the verified record. First, chokepoint risk is not theoretical. A waterway that carried about a quarter of seaborne oil and about a fifth of world LNG in 2025 cannot be treated as a marginal contingency in national energy plans. Second, pre crisis buffers mattered. The surplus of 3.7 million barrels a day, the 8.2 billion barrels in storage, China’s stored imports, and the readiness of IEA emergency stocks all limited the immediate damage. Countries that enter the next crisis with thin inventories will have fewer options. Third, bypass infrastructure has a hard ceiling. Even with Saudi Yanbu and UAE Fujairah routes running hard, only a fraction of pre conflict Hormuz volumes can be replaced by pipelines. Fourth, product markets, especially diesel and jet fuel, tightened faster than the crude balance alone suggested, because Middle East product exports were interrupted alongside crude.
Three lines of work follow. Track one is continuous verification of Hormuz clearance and bypass utilisation against IEA and commercial flow data, without extrapolating beyond published figures. Track two is stress testing of national stockholding and demand restraint frameworks against a multi month loss on the scale already observed, more than 1.3 billion barrels of cumulative Middle East supply loss and average Hormuz flows of only 2.7 million barrels per day in the first three full months of the war. Track three is mapping how Atlantic Basin export capacity, particularly from the United States, can be mobilised again if diplomacy fails and Hormuz traffic falls back toward the March to May average. Each rests on evidence that is already published.
The Hormuz shock of early 2026 will leave lasting marks on investment, trade partners, supply routes and fuel choices. Companies and governments are already reviewing energy strategies. For an institute focused on transition economics, the lesson is not that fossil fuel trade has become obsolete. It is that transition pathways must be designed with realistic chokepoint shocks in mind, using British style analysis that privileges verified magnitudes over narrative speculation. The IEA’s own conclusion remains the right north star: emergency stocks and agile trade can buy time, but they cannot substitute for the full reopening of the Strait of Hormuz to unimpeded shipping.