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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.
USD rallied strongly in Thursday’s session after a quiet start following dismal demand for US 30 year-treasuries at a scheduled bond auction, seeing yields surge and taking the USD with them. The push higher was later given an extra boost by Fed Chair Powell’s hawkish statements during a panel organized by the IMF. In a scheduled panel chat the FOMC head said that “policymakers are not confident that they have achieved a sufficiently restrictive stance to return inflation to the 2.0% target in a sustained manner.” That was enough to see the USD bulls take charge with DXY up 0.4% for the day, while yields also spiked, this saw some volatility in USD cross pairs and gold we’ll look at the highlights in the charts below.
USDJPY TECHNICAL ANALYSIS USDJPY pulled back last week after the BoJ tweak to their YCC saw Japanese bond yields rise, giving the Yen a boost. However, as has been the case with this pair in the last 12 months the uptrend quickly resumed, with USDJPY breaking back above the key 151 level and heading towards its 2022 and 2023 high of 151.72. At these levels there is always the threat of a BoJ currency intervention, so traders will need to keep an ear out for any jawboning from BoJ members telegraphing such a move.
If the BoJ steps aside a test of the upper trend line at 154 could be a possibility. If they do step in we could see a decline to a 146 handle and lower trendline before finding any technical support. GOLD TECHNICAL ANALYSIS Gold has reversed lower this week after the upward momentum failed at the key 2010 resistance level.
Risk premium priced into gold also started to unwind after gaza conflict haven flows pushed the price rapidly higher from early October. Thursday session did see a modest bounce, despite a rampant USD which could give the bulls some hope, however the 23.6 Fib level, which acted as short-term support on the way down now seems to have switched to resistance. This will be the level on the upside to watch (1963.78), the next resistance from a technical point of view will be the 2010 level.
To the downside the 38.2 Fib at 1934.79, which also matches up with the 200 day SMA looks to be the first real support level.
AUDUSD dropped in Tuesday’s session with AUD being weighed on post-RBA decision, as the less hawkish RBA guidance outweighed the widely anticipated 25bps hike to 4.35%. Though the market reaction was a little curious given the small changes to the accompanying statement hardly made it dovish. The RBA changed its forward guidance to say "whether further tightening of monetary policy is required...will depend upon the data" from the previous “Some further tightening of monetary policy may be required".
The push lower was also exacerbated by based weakness in the commodity space after a miss in Chinese trade data. Looking at the chart for trading opportunities we can see AUDUSD is trading in a defined range with major resistance at the 0.6500 level and major support at 0.6300 which opens up range trading opportunities with defined stop losses above or below these key levels, another key level is 0.6400 being the mid-price of the range and a level that price has chopped around recently. I think we are likely to see a bit more weakness in AUD on the back of the RBA and risk premiums coming out of gold and oil putting pressure on those commodities.
USDJPY continues to drift higher above the key 150 level into past intervention territory after the dip last week after the BoJ tweaked their YCC to extend the band, allowing Japanese yields to move higher and giving support the Yen. The drop in US yields over the past week and the modest gains in Japanese yields has seen the US 10-year / Japanese 10-year rate differential fall steeply, this rate differential has been a key driver of the USDJPY rate. However, as seen on the chart below USDJPY is remaining stubbornly high despite this, with a decent gap opening up between the rate differential and USDJPY rate.
Whether this gap “fills” i.e. a drop in USDJPY to reflect this rate differential is the question, going from the recent past it would look likely unless we see another leg higher in US yields. For Yen traders the October BoJ SOO released on Thursday will be the next decent data point to keep an eye on.
AUDUSD AUD saw gains to come within a whisker of the key 0.64 level, after hawkish leaning commentary from RBA Assistant Governor Kohler, who noted the decline in inflation is more gradual than previously thought. The Aussie also helped by a weaker USD and improved risk sentiment. The 0.64 level will be key in the near term as the mid-point of AUDUSD 3-month trading range is likely to act as resistance and support and will dictate which side of the range AUDUSD will be testing next.
USDJPY USDJPY rose to fresh peaks of 151.92 before a sharp move lower in the cross was observed without any clear catalyst which of course generated suspicions of intervention, especially given the move happened around 10am EDT, where intervention has occurred before. Also adding to the intervention narrative was comments from Japanese Finance Minister Suzuki during the Asian session where he spoke of “undesirable moves in the FX market”. USDJPY fell sharply from 151.92 to 151.19 but did retrace back to 151.70 after the dust settled, if this was a BoJ intervention it seems the 152 level may be the line in the sand and one to watch closely for Yen traders.
XAUUSD Gold rallied on Monday, recouping around half of Fridays losses after finding support at its the Oct lows to highs 38.2 fib retracement level which also matches up with the 200-day SMA. A weaker USD and falling yields also giving gold a boost along with residual safe haven demand.
Last week’s action in the FX markets was shaped by a pushback by the Fed chair Jerome Powell and assorted other Fed members on markets pricing in a less hawkish Fed going forward. What was seen as a dovish FOMC and a big miss in NFP the week before saw traders piling back into risk assets with traders hoping for a less aggressive Fed, it seemed pushback from Powell and company was inevitable, and pushback we got with a slew of hawkish comments from the Fed chair and his colleagues. USDOLLAR Last week’s fluctuations in the USD highlighted the influence of yields as the US Dollar index tracked the US 10-year yield almost tick for tick.
Key inflation figures from the US this week will test the Feds recent hawkish narrative with US CPI figures out on Tuesday and PPI out on Thursday. The US dollar index did stage a comeback last week, whether that comeback continues this week will be shaped by these figures one would expect. GBPUSD In the UK the recent hold in rates by the BoE has traders feeling that their rate hiking cycle is done and dusted with market pricing favouring another hold at the BoE December meeting with only a 9% chance priced in of a hike.
Sterling traders this week will be watching employment data out on Tuesday, UK CPI on Wednesday and retail sales on Friday. It would take some big beats to move the needle on rate hike expectations, but with limited data left after this week before the banks next meeting, these readings will take on extra importance. GBPUSD has been trading in an upward sloping channel since late September, the levels to watch over these announcements will be support at the lower band around 1.2170 and resistance at the top band around 1.2470.
AUDUSD The Aussie took a beating last week after what was widely seen as a dovish rate hike out of the RBA on Tuesday, AUDUSD had been testing major resistance at 0.6500 before reversing course and crashing down to 0.6340 by the end of the week. AUDUSD is now in the lower half of its 3-month range and finding some support but Chinese industrial production and Australian wage data on Wednesday along with Australian employment data Thursday could see the key support level at 0.63 is in play if these figures miss expectations. Full calendar of major news releases below: https://www.gomarkets.com/au/economic-calendar/
The WTI Crude Oil market is in an interesting spot on the charts, hitting a 10-month high in Wednesday's session. This strong performance comes after repeatedly testing and holding the $66-67 support level, resulting in an impressive climb of over 30% since the beginning of July. Having broken through a significant resistance level around $82 that had been tested 7 times since December 2022, the price now faces a couple of technical hurdles ahead.
Currently hovering just below $89 at a first resistance challenge, it's a potential pit stop where we might see a temporary pause or even a reversal if the momentum takes a breather. Should the momentum continue, the path to a critical resistance level at around $93 becomes relatively clear. This level proved resilient in two prior attempts to breach it back in October and November 2022, making it a level to keep an eye on for traders.
Taking a look at the daily Relative Strength Index (RSI), it's currently in overbought territory, suggesting there could be room for a cool off. There is potential for a retracement back to the $81-82 level, where we’ll be watching to see if that resistance zone flips to support. Alternatively, if the current momentum continues, the initial resistance level may fail, giving some clean air to run up to the $93 zone.
In a bit of an anti-climax in an exciting week in Central Bank action for FX traders today saw the BoJ keep the status quo of an ultra-accommodative monetary policy as expected. But disappointing the Yen bulls was the BoJ offering no clear sign of a shift in its policy stance in the near term after some speculation a clearer hint to normalization of policy could be given at this meeting. This saw re-positioning in USDJPY putting pressure on the yen and spiking the USDJPY higher into the intervention zone where the Japanese Ministry of Finance forcefully entered the FX market late in 2022.
This is setting up as a real game of chicken between the markets and the Bank of Japan, with policy BoJ policy on hold for the foreseeable future, the grind higher in USDJPY seems inevitable while rate differentials between US10Y and JP10Y yields also continue to rise. The close relationship between this differential and USDJPY can be seen on the following chart. Without a change in rates policy, FX intervention is looking like it may be the only way for this trend to change course and with comments like the below from Japanese Finance Minister Suzuki today we may see it sooner rather than later.