Strait of Hormuz Closed, 1 Billion Barrels of Oil Lost
Jakarta, CNBC Indonesia - The global oil market has lost at least 1 billion barrels due to the war in Iran. Vitol CEO Russell Hardy stated that, in addition to crude oil, refined products are also affected by the ongoing Middle East conflict.
The Vitol leader since 2018 said that attacks on energy infrastructure in the Gulf and the closure of the Strait of Hormuz have resulted in the loss of around 12 million barrels of oil production per day since the US and Israel first bombed Iran at the end of February.
“Roughly, the 1 billion [barrels] figure is already accounted for now because we may have lost 600 million to 700 million at this stage, but as the situation starts to move again—if it does indeed move again—it will take time to restore everything [the closed or damaged infrastructure],” Hardy said at the FT Commodities Global Summit in Lausanne, quoted on Wednesday (22/4/2026).
The head of the world’s largest oil company stated that this war is the biggest disruption in the energy market during his nearly 40-year career. It is even worse than the 1990 Iraq-Kuwait conflict.
“Currently, all reserve capacity is behind the Strait of Hormuz, so the impact is clearly very direct,” he explained.
Commodity traders have repeatedly warned that the effects of the Strait of Hormuz closure are far from over, even if the White House and Iran reach an agreement in the coming days.
Market players have warned of a global food shock due to low fertiliser supplies following the loss of gas supplies from the Middle East. Moreover, there is a slowdown in copper mining due to the loss of sulphuric acid supplies from the Gulf, while the risk of energy shortages increases every day as long as the strait remains closed.
The loss of 1 billion barrels is equivalent to about 10 days of global oil consumption and more than twice the amount released from strategic reserves in efforts to mitigate the impact on energy supplies.
The same sentiment was expressed by Gunvor’s chief executive, Gary Pedersen, who warned of serious impacts from the continued closure of the Strait of Hormuz.
“When you stop such a large energy supply through the supply chain for this long and potentially longer, the consequences of this are very real,” he said.
Frederic Lassere, head of research at Gunvor, predicted that the war will trigger a global recession if the Strait of Hormuz is not reopened by the end of July.
“If we don’t get the reopening [of the strait] in the next three months, then this will become a macro issue where the world plunges into recession,” he said.
Meanwhile, Trafigura CEO Richard Holtum argued that although the economy will be hit by higher prices, the richest countries should be able to avoid real physical shortages.
Holtum said the situation is similar to the European gas crisis following Russia’s massive invasion of Ukraine in 2022. “Europe lost a third of its gas supply, but Europe did not experience power outages,” he said, adding that prices did surge, but there was no supply shortage.
“The exact same thing will happen here. Wealthy countries will protect their consumers, and less able countries to pay will suffer from demand reductions,” he added.
Traders and analysts remain sceptical about the US’s ability to reach an agreement leading to the swift reopening of the strait.
Helima Croft, global head of commodity strategy at RBC Capital Markets, said that US equity markets are trading near all-time highs, partly because traders are betting wrongly on a quick resolution.
“I think there’s also an assumption that President [Donald] Trump could just sit in the White House and fix this,” she said.
“People keep saying, ‘yeah, he might back down’, but once again, it takes two parties to ‘Taco’,” she added.