Shipping through the Strait of Hormuz has effectively ground to a halt since the Iran war, with total daily cargo traffic — dry and liquid — collapsing from pre-war levels of 80-100 to a maximum of around four. As a result, crude volume stranded at sea has surged over 45 times from just 1.9 million barrels in mid-February to a peak of 86.7 million barrels by mid-March, before easing to around 80 million barrels by month-end and to 72 million barrels currently, according to Kpler data.
While vessel movement was relatively stable through late February, flows dropped abruptly thereafter, with as few as 1-2 cargoes crossing on multiple days in March. The persistently low levels of cargo movement via the Strait were despite selective passage of oil tankers and other cargo facilitated by Tehran for friendly countries such as China, Russia and India. Even though flows partially recovered in April, daily crossings remained significantly below normal, largely fluctuating between 4 and 10 vessels.
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The collapse in tanker traffic has triggered a parallel surge in floating oil storage, as exporters struggle to move cargoes through disrupted routes. Weekly data showed offshore crude volumes rising from just 1.9 million barrels on February 15 to 2.3 million barrels by February 22 and 2.5 million barrels by March 1, before accelerating sharply as the crisis deepened.
Logistical Gridlock
Floating crude storage rose to 7.8 million barrels by March 8, before surging nearly sixfold to 43.3 million barrels by March 15, and peaking at 86.7 million barrels by March 22 — the highest level recorded during the crisis period.
Following the outbreak of the West Asia conflict, crude and condensate volumes on water in the Gulf jumped threefold to around 145 million barrels by March 22 from about 50 million barrels on February 22, based on weekly data, “reflecting effectively stalled tanker movements through the Strait of Hormuz,” Nikhil Dubey, senior refining analyst, Kpler.
Despite some easing thereafter, storage levels remained elevated at 80.6 million barrels on March 29; 72.1 million barrels on April 5; 79.6 million barrels on April 12; and 72.4 million barrels on April 15, indicating persistent evacuation bottlenecks and limited cargo mobility.
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The simultaneous collapse in shipping flows and surge in offshore inventories highlights a severe logistical breakdown in global oil supply chains, where crude availability remains high but deliveries have sharply deteriorated.
Path to Recovery
The supply shock is also reflected in production data. The Iran war wiped out 7.88 million barrels per day of OPEC’s production in March, resulting in the biggest supply collapse for the producers’ group in recent decades. OPEC production fell 27% to 20.79 million barrel per day (bpd) in March. The supply shock surpasses OPEC’s cutting back of 6.28 million bpd recorded in May 2020, after the Covid-19 pandemic hit global oil demand hard.
Iraq’s output dropped 61% to 1.63 million bpd, while Saudi Arabia’s production fell 23% to 7.8 million bpd. Kuwait’s output declined 53% to 1.21 million bpd, and the UAE saw a 45% drop to 1.89 million bpd.
The International Energy Agency (IEA) termed the situation the “largest disruption in history” to global oil supply. With exports constrained, inventories have built unevenly. The IEA noted that floating storage in West Asia alone rose by 100 million barrels in March.
The disruption has also spilled over into refining, with global refinery runs cut by around 6 million bpd in April.
Attempts to reroute supplies via alternative corridors such as Saudi Arabia’s Red Sea ports and the UAE’s Fujairah terminal have only partially offset losses.
The IEA said the trajectory of global oil markets now hinges on one critical factor. “Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices and the global economy,” it said.
Even as a tentative ceasefire holds, tanker flows remain volatile and offshore crude continues to accumulate, signalling that global oil supply chains remain under severe stress.
TOPICSStrait of HormuzThis article was first uploaded on April seventeen, twenty twenty-six, at five minutes past twelve in the am.