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The 8 April ceasefire announcement and parallel discussions around a 45-day truce have not resolved the Strait of Hormuz disruption. They have, for now, capped the worst-case scenario, but tanker traffic remains at a fraction of normal levels and Iran's demand for transit fees signals a structural shift, not a temporary one.
What began as a regional conflict has become a global energy shock, and the question for markets is no longer whether Hormuz was disrupted, but how permanently the disruption changes the pricing floor for oil.
Key takeaways
- Around 20 million barrels per day (bpd) of oil and petroleum products normally pass through the Strait of Hormuz between Iran and Oman, equal to about one-fifth of global oil consumption and roughly 30% of global seaborne oil trade.
- This is a flow shock, not an inventory problem. Oil markets depend on continuous throughput, not static storage.
- If the disruption persists beyond a few weeks, Brent could shift from a short-term spike to a broader price shock, with stagflation risk.
- Tanker traffic through the strait fell from around 135 ships per day to fewer than 15 at the peak of disruption, a reduction of approximately 85%, with more than 150 vessels anchored, diverted, or delayed.
- A two-week ceasefire was announced on 8 April, with 45-day truce negotiations under way. Iran has separately signalled a demand for transit fees on vessels using the strait, which, if formalised, would represent a permanent geopolitical floor on energy costs.
- Markets have begun rotating away from growth and technology exposure toward energy and defence names, reflecting a view that elevated oil is becoming a structural cost rather than a temporary risk premium.
The world’s most critical oil chokepoint
The Strait of Hormuz handles roughly 20 million barrels per day of oil and petroleum products, equal to about 20% of global oil consumption and around 30% of global seaborne oil trade. With global oil demand near 104 million bpd and spare capacity limited, the market was already tightly balanced before the latest escalation.
The strait is also a critical corridor for liquefied natural gas. Around 290 million cubic metres of LNG transited the route each day on average in 2024, representing roughly 20% of global LNG trade, with Asian markets the main destination.
The International Energy Agency (IEA) has described Hormuz as the world’s most important oil transit chokepoint, noting that even partial interruptions may trigger outsized price moves. Brent crude has moved above US$100 a barrel, reflecting both physical tightness and a rising geopolitical risk premium.
Tankers idle as flows slow
Shipping and insurance data now point to strain in real time. More than 85 large crude carriers are reported to be stranded in the Persian Gulf, while more than 150 vessels have been anchored, diverted or delayed as operators reassess safety and insurance cover. That would leave an estimated 120 million to 150 million barrels of crude sitting idle at sea.
Those volumes represent only six to seven days of normal Hormuz throughput, or a little more than one day of global oil consumption.
Updated shipping and insurance data now confirm more than 150 vessels have been anchored, diverted, or delayed, up from the 85 initially reported. The 1.3 days of global consumption coverage from idle crude remains the binding constraint: this is a flow shock, not a storage problem, and the ceasefire has not yet translated into meaningfully restored throughput.
A market built on flow, not storage
Oil markets function on continuous movement. Refineries, petrochemical plants and global supply chains are calibrated to steady deliveries along predictable sea lanes. When flows through a chokepoint that carries roughly one-fifth of global oil consumption and around 30% of global seaborne oil trade are interrupted, the system can move from equilibrium to deficit within days.
Spare production capacity, largely concentrated within OPEC, is estimated at only 3 million to 5 million bpd. That falls well short of the volumes at risk if Hormuz flows are severely disrupted.
Oil market analysis
How long do idle tankers last?
135M idle barrels — days of cover against each demand benchmark
vs. Strait of Hormuz daily flow (20M bbl/day)
vs. Global oil consumption (104M bbl/day)
vs. US Strategic Petroleum Reserve release (1M bbl/day)
135M
idle barrels on tankers (midpoint of 120–150M range)
~33%
of daily Hormuz flow that is idle storage, not transit
<31 hrs
is all idle storage against global daily consumption
Inflation risks and macro spillovers
The inflationary impact of an oil shock typically arrives in waves. Higher fuel and energy prices may lift headline inflation quickly as petrol, diesel and power costs move higher.
Over time, higher energy costs may pass through freight, food, manufacturing and services. If the disruption persists, the combination of elevated inflation and slower growth could raise the risk of a stagflationary environment and leave central banks facing a difficult trade-off.
No easy offset, a system with little slack
What makes the current episode particularly acute is the lack of slack in the global system.
Global supply and demand near 103 million to 104 million bpd leave little spare cushion when a chokepoint handling nearly 20 million bpd, or about one-fifth of global oil consumption, is compromised. Estimated spare capacity of 3 million to 5 million bpd, mostly within OPEC, would cover only a fraction of the volumes at risk.
Alternative routes, including pipelines that bypass Hormuz and rerouted shipping, can only partly offset lost flows, and usually at higher cost and with longer lead times.
Bottom line
Until transit through the Strait of Hormuz is restored and seen as credibly secure, global oil flows are likely to remain impaired and risk premia elevated. For investors, policymakers and corporate decision-makers, the core question is whether oil can move where it needs to go, every day, without interruption.
The new trading year kicked off with a dip in equities with Big Tech leading losses in Tuesday’s session, AAPL being the big loser after a downgrade from Barclays citing concern in iPhone demand. Yields and the USD ripped higher, the US Dollar Index having its biggest daily gain since March 2023. Crude oil capped off an interesting session with a pump and dump rollercoaster ride.
Charts To Watch: Apple - AAPL Apple stock fell 3.6% during Tuesdays New York session, it’s worst day since August. The dump came after Barclays downgraded the iPhone maker and lowered its price target on concerns of slowing iPhone sales, particularly in China. This saw the stock price gap down, erasing all of December’s gains and hitting a low of 183.89 before finding some bids and rebounding modestly.
US Dollar Index – DXY DXY surged on the first trading day of 2024, having its biggest up day since March 2023, there was little in the way of newsflow behind the move but more a result of a jump in yields and some oversold technicals that were amplified by a low volume session. DXY retaking the 200-day SMA and 102 handle, hitting a high of 102.22, the next test to the upside being the resistance around 102.57. Crude Oil – USOUSD The most interesting move today was in Crude Oil, initially surging in the APAC session amid growing Middle East tensions, only to dump at the start of the US session with no obvious catalyst.
Some souring of risk sentiment and a stronger USD seemingly the only drivers. USOUSD finishing the session just above 70 USD a barrel, with the major support at 67 the next level to watch to the downside.
Global markets chopped about in Tuesday’s session with no key data released with traders seemingly waiting on the sidelines for US CPI and a slew of bank earnings later in the week. Gold – XAUUSD XAUUSD rallied in Tuesdays APAC session testing the 2040 USD an ounce resistance level before a sharp drop as Europe opened saw drop to a low of 2026. This will be a key level to watch for the gold bulls with 2040 now establishing itself as a cap to further price increase.
AUDUSD The Aussie dollar took a hit on mixed risk sentiment, reversing modest gains made in the APAC session on a surprise beat in building approvals and above-forecast retail sales. AUDUSD losing the 0.67 handle and holding around 2024 lows. Ahead today AUDUSD traders will a CPI reading to navigate, with Year on year inflation expected to drop to 4.4% from last months reading of 4.9%.
Crude Oil – USOUSD Crude oil pared some of Mondays’ steep losses with Mid-East tensions continuing stoking supply concerns. USOUSD continuing to trade in its 2024 range of 70 support to the downside and 74 resistance to the upside. Geopolitical events currently being the main driver of crudes price action.
Ahead today with have Aussie CPI in the APAC session and BOE Governor Bailey speaking in the UK session.
USD was ultimately flat in a choppy session on Thursday after hotter-than-expected US CPI data. The US Dollar Index (DXY) hitting briefly breeching the resistance at 102.63 to hit a high of 102.76. This proved to be another false breakout of this level with DXY gradually retracing for the rest of the session to unchanged levels.
JPY outperformed, after an initial spike higher in USDJPY above 146 after the CPI reading, the retracement was more profound in this pair with it ultimately trading just above the psychological 145 level. A report did hit the newswires that said the BoJ is considering lowering its price outlook for FY2024 to the middle 2% range, though with dovish BoJ expectations being priced in it didn’t deter the Yen bulls. Risk sensitive currencies GBP and AUD had a mixed reaction.
GBPUSD making gains ahead of the UK GDP reading today. AUDUSD posting losses despite better than expected trade data that seemed to be interpreted as more evidence of a slowing Aussie economy. Gold again tested the 2040 USD an ounce resistance before a spike in the USD post CPI saw a steep decline to a low of 2013.
Early in the APAC session the Gold bulls look keen to test this level again with XAUUSD rebounding to around 2035. This will be a key level to watch for Gold traders.
USD ultimately ended lower on Monday with the US Dollar Index (DXY) first testing the resistance at 102.57 to the upside before reversing course to test the support at 102 to the downside. A risk on equity markets and some dovish developments. Data saw the NY Fed Survey show lower than expected inflation expectations.
There was also a dovish call from Bank of America regarding the Feds holdings of US Treasuries along with what was seen as dovish comments from Fed members Bostic and Logan all weighing on the Greenback. JPY bounced back against the USD after its weak start to 2024. USDJPY falling from highs of 144.92 to lows of 143.67 before finding some support.
Possible positioning before todays Tokyo CPI figure and a fall in US yields seemingly the drivers. CHF also saw decent gains against the USD and EUR after a hotter than expected December Swiss CPI print where the year-on-year inflation rate rose to 1.7% against an expected 1.5% Crude Oil prices were a big mover with USOUSD dropping almost 3% as a result of sharp price cuts by top exporter Saudi Arabia stoked demand fears. There was also a reported rise in OPEC output offsetting any supply worries generated by the ongoing tension in the Middle East.
USOUSD finding support at the 70 USD a barrel support level for now, the next level lower to watch will be the major support at 67 USD a barrel.
The recovery in strength on the DXY has led to Gold reversing strongly from the all-time high of 2088 which was reached at the end of 2023. Last week, the US employment data was released stronger than expected with the Non-Farm employment change at 216K (Forecast: 168K), however, wage inflation remained unchanged at 0.4%. This set of data is likely to push back the anticipated timeline for potential Fed rate cuts, from March to May, which could see further upside potential for the DXY.
Gold is currently trading along the 2032 price level which coincides with the 50% Fibonacci retracement. If the DXY continues to climb, further downside can be expected for Gold. Look for the price to test the bullish trendline at the 2020 price level to signal further downside, with the next key support level at 2007.
Beats in US employment data ahead of today’s key Non-farm payroll figure saw the US Dollar Index eke out another gain after weakness in the APAC session reversed in the European session. DXY up for the 5 th straight day, having its longest winning streak since September and it’s best start to a year since 2005. DXY hit a high of 102.53, still being held from further gains by the resistance at 102.57, a level that could be under pressure in the US session if the NFP report mirrors the beats in the ADP figure and unemployment claims released on Thursday.
The Euro was the G10 outperformer on Thursday with a spike in Eurozone yields after beats in French, German and Spanish PMI readings ahead of today’s Eurozone CPI figures. EURUSD continued its bounce off the psychological 1.09 support level, hitting a high of 1.0972 and keeping the upward trend channel intact that has been forming since October. With EZ CPI and NFP ahead today these will be key levels to keep an eye on.
JPY was the G10 underperformer with USDJPY rallying within a whisker of the big figure at 145, Yen also showing weakness against the EUR as both US and EZ yields rallied, increasing yield differentials against their Japanese counterparts.