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Strait of Hormuz blockade fuels historic shortfall and lifts US oil shipments

A three-month military conflict with Iran and the ensuing near-total blockade of the Strait of Hormuz have radically reshaped global energy flows. According to LSEG and Kpler, the halt of stable transit through the world’s key artery has triggered a historic raw material shortfall and a record surge in maritime logistics costs.

Before the US and Israeli military operation in late February, about 70 tankers transited the strait daily, supplying one-fifth of global consumption of oil, petroleum products, and LNG. Since March 1, that figure has plunged 88% to fewer than seven vessels per day, and in May, it fell below six. As a result, monthly exports of liquid hydrocarbons from the Middle East were cut in half—from 75 million to 36 million tons. Total shipments from the region fell to 260 million tons over five months, compared with 360 million tons for the same period last year.

Part of the shortfall was offset by suppliers from the Western Hemisphere. US oil exports jumped 16%, reaching a record 86 million tons, while combined shipments from North and South America increased by 28 million tons. Nevertheless, other regions could not plug the deficit because of technological constraints in Africa and strict sanctions on Russian oil. In January–May, global seaborne oil shipments declined 8%, and the market of refined fuels (gasoline, diesel, and jet fuel) slipped 8.7%.

The logistics crisis has produced an unprecedented rise in freight costs. LSEG data shows the spot rate for transporting oil on ultra-large crude carriers from the Middle East to China soared from $130,000 to $500,000 per day at the peak of the bombing and now stands at $390,000. Freight rates for product tankers on key routes also more than doubled. Traders are redirecting fleets en masse to service US ports, but importers are forced to overpay for delivery, adding to global inflationary pressure. Industry analysts warn that without a swift peace agreement, the situation will become critical by fall, when the countries’ accumulated domestic fuel stocks are exhausted.

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