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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.
In the midst of the Russian, Ukraine crisis, there are huge ramifications that affect us all in the global market. Energy is a critically important export. Russian oil and gas exports make up a fifth of Russia's economy and half of its earnings from exports.
The country is the European Union's biggest oil trading partner, according to the latest data from Eurostat. Russia also ranks 5 th in the world for oil consumption, accounting for about 3.7% of the world's total consumption of 97,103,871 barrels per day. They are also ranked 3 rd in oil production, which is the most important factor when it comes to costs, sitting close to the oil powerhouses of United States and Saudi Arabia.
They are also some way ahead of China, who sits in 4 th lagging behind Russia by a wide margin of 6 million barrels per day (Fig.1). As you can imagine any disruption to any country in this list on a normal day, would trigger a price movement. So a war and subsequent sanctions on a country who controls so much consumption and production of the precious liquid would make more than a ripple.
Global benchmark April Brent crude climbed $3.06, or 3.1%, to end at $100.99 a barrel. The contract, which expired at the end of the session, settled at its highest since September 2014, posting a gain of 10.7% for the month. West Texas Intermediate crude for April delivery on the New York Mercantile Exchange rose $4.13, or 4.5%, to settle at $95.72 a barrel.
The front-month contract finished at the highest since August 2014, up 8.6% for the month, according to Dow Jones Market Data. Latest Price Action Over the last few days, we have seen Oil prices finished higher each closing day, a sharp increase over night of 9.72% to start today’s session at $106.33 (Fig.2). Fig. 2 WTI Oil followed suit and had a jump of 11.5%, a sharp increase over night to start today’s session at $106.75 (Fig.3).
Fig. 3 The Wall Street Journal reported that the U.S. and other major oil-consuming countries were weighing the release of 70 million barrels of oil from emergency stockpiles in response to surging crude prices. This is to try to stabilize the oil prices and make up the supply that Russia would normally deliver pre sanctions. It’s important to tread carefully when trading assets such as these commodities, which are driven by Geopolitics, unforeseen supply and demand levels and corporate institutions around the world who have their own agendas in mind when thinking of their bottom line.
Profits. Sources: QUARTZ, worldometers.info, The Wall Street Journal, Tradingview.
All prices in this article will be in USD unless otherwise stated. Rio Tinto Group is an Anglo-Australian multinational and the world's second-largest metals and mining corporation, behind BHP, producing iron ore, copper, diamonds, gold and uranium. Rio Tinto made history last week by posting the second biggest profit in Australian corporate history, the biggest belonging to BHP.
They have decided to reward their shareholders with Australia’s biggest ever dividend worth $16.8 billion, which is roughly $23 billion AUD. The $21.4 billion of underlying earnings for 2021 was the biggest in all of Rio Tinto’s 149 year history. The achievement has allowed a dividend payment of $4.79 per share.
The final and special dividends took Rio Tinto’s total dividends for the year to a record-breaking $10.40 per share. The total dividends paid by Rio Tinto for the year is almost doubled the previous year’s $5.57. The greatest profit recorded by an Australian company was BHP.
They set this record in 2011 with a recorded $21.68 billion in underlying profit. Comparing both companies, BHP’s record profit was when the Australian dollar was much stronger than today. This means the profit announced by Rio Tinto would be much bigger than BHP, in Australian dollars, $22.5 billion vs $23 billion AUD.
This does not take into account inflation. Rio Tinto’s great result was largely attributed to its most important commodity, iron ore. However, the decade high prices for copper and aluminium have also bolstered their profits.
The shareholder returns unleashed by Rio Tinto over the past four years rank as the four biggest in the company’s history, meaning shareholders in the miner are enjoying a golden era of returns. The “golden era” was initially built on the proceeds of asset divestments, however, Australian mining companies have been fortunate due to rival mining companies in Brazil suffering massive dam failures in 2019. Australia was able to capitalise on the weak iron ore supply in the aftermath.
The strong operating environment for mining companies like Rio Tinto has only continued since the onset of the COVID-19 pandemic. The pandemic had prompted governments to announce stimulus spending on infrastructure which drove strong demand for the raw materials which were produced by the likes of Rio Tinto and BHP. Most of Rio’s record setting dividend will be paid to shareholders outside of Australia; the company’s biggest shareholder is Chinese state-owned entity Chinalco while most investors own the stock through the London Stock Exchange.
All in all, the mining industry is currently experiencing a strong year. Rio Tinto, being one of the biggest players, has set the benchmark for other companies in the industry. The strong start to the year is a good indication as to where the industry is going.
If you would like to take this opportunity to invest in Rio Tinto Group and don’t already have a trading account, you can register for a Shares or Shares CFD account at GO Markets. Sources: ASX, Wikipedia, AFR.
Results are in – NVIDIA reports NVIDIA Corporation (NVDA) announced its second quarter results after the closing bell in the US on Wednesday. The US technology giant reported revenue that exceeded analyst expectations at $6.704 billion for the quarter vs. estimate of $6.699 billion. Earnings per share reported at $0.51 per share, narrowly beating estimate of $0.50 per share for the second quarter. ''We are navigating our supply chain transitions in a challenging macro environment and we will get through this,'' founder and CEO of NVIDIA, Jensen Huang said in a statement following the latest results. ''Accelerated computing and AI, the pioneering work of our company, are transforming industries.
Automotive is becoming a tech industry and is on track to be our next billion-dollar business. Advances in AI are driving our Data Center business while accelerating breakthroughs in fields from drug discovery to climate science to robotics.'' ''I look forward to next month’s GTC conference, where we will share new advances in RTX, as well as breakthroughs in AI and the metaverse, the next evolution of the internet. Join us,'' Huang added.
NVIDA expects revenue of around $5.9 billion for the third quarter, which is short of analyst estimate of $6.9 billion for the quarter. NVIDIA Corporation (NVDA) chart Shares of NVIDIA were little changed on Wednesday, up by 0.24% at $172.12. The stock fell in the after-hours by around 3% on future outlook.
Here is how the stock has performed in the past year: 1 month -3.19% 3 months +1.46% Year-to-date -41.44% 1 year -22.47% NVIDIA price targets Truist Securities $216 Mizuho $250 Raymond James $240 Barclays $200 Deutsche Bank $175 Citigroup $285 Keybanc $230 NVIDIA Corporation is the 13 th largest company in the world with a market cap of $429.17 billion. You can trade NVIDIA Corporation (NVDA) and many other stocks from the NYSE, NASDAQ, HKEX and the ASX with GO Markets as a Share CFD. Sources: NVIDIA Corporation, TradingView, MetaTrader 5, Benzinga, CompaniesMarketCap
The Reserve Bank of Australia, (RBA) has increased the Country’s cash rate by half a percent to combat the rising inflation in its latest cash rate change. The increase was in line with most analyst’s expectations as the RBA continues to fight inflation and bring it back into the 2-3% range. The current forecast from the RBA suggests that CPI inflation will peak near 7.75% over 2022, before falling to 4% during 2023, and then settling at 3% in 2024.
A key source of concern for the RBA was and continues to be the current spending habits of Australian households. Importantly, as the cost of goods has risen due to inflation, pressure has built on household budgets and their spending habits. This has been caused by both the supply chain issues and the increased cash rate.
Furthermore, consumer confidence has fallen, and “housing prices are declining after the large increases in recent years.” This shows how interest rate hikes are impacting the lives of Australians and their spending habits. Another important factor at play is the tightening of the job market. The unemployment rate dropped in June to 3.5%, the lowest rate in 50 years, and job vacancies and job advertisements continue to be at high levels.
However, the bank does not expect to be able to hold these levels and predict the rate of unemployment will reach 4% by the end of 2024 as a result of the current slowing economic growth. In response to the announcement, the ASX200 responded positively as investors saw the announcement as bullish, shooting up 0.38% in the 30 minutes after the announcement. Conversely, the AUDUSD dropped back below $0.70 dropping to $0.6970 in the 30 minutes immediately after the announcement.
The RBA will later this week further update the market with its monetary policy statement which will provide further clarity on its decision-making and the current sentiment.
Qantas Airways Limited (QAN:ASX) is the flagship carrier of Australia and the country's largest airline by fleet size. The company has had a resurgence in 2022 and the share price has rebounded from the lows of the pandemic. The “Flying Kangaroo” as it’s known throughout the industry, said that it would report an underlying pre-tax profit of up to A$1.3bn (US$815mn) in the six months to December, doubling market estimates, as strong demand for flights offsets higher fuel costs and inflation.
The improved financial performance has come from the company transferring the increased costs via increased fairs. The share price for the airline soared to $5.83, its highest level since November 2021, on the back of the strong profit forecast. Qantas’s pre-pandemic share price was sitting at $7.35 AUD and saw its financial performance suffer with 3 consecutive years of more than A$1bn losses because of pandemic restrictions and lost A$25bn of revenue during the period.
Net debt, which spiralled to almost A$6.5bn during the pandemic, is expected to fall to between A$3.2bn and A$3.4bn by the end of the year, well below the airline’s A$3.9bn target range. Alan Joyce, Chief Executive gave a promising statement on the company’s performance advising, “It’s been a really challenging time for the national carrier, but today’s announcement shows how far we’ve come. Since August, we’ve seen a big improvement in our operational performance and an acceleration in our financial performance.” The report in profits has come too late for investors to receive a final dividend this year, with the company deciding not to reverse its decision to halt dividend payments.
However, it’s not all doom and gloom for investors, as Alan Joyce has led a A$400mn share buyback this year. Share buybacks do not put cash in the hands of investors as a dividend does. However, they do support shareholders by reducing the overall share count.
This tends to boost the share price, given that under the laws of supply and demand, less supply leads to a rise in price. If you are interested in venturing into trading stocks, FX or commodities, you can create access to one of our MetaTrader 5 trading CFD platforms with GO Markets here or call our Melbourne based office on 03 8566 7680 to discuss your trading goals with our account managers and to get started. Sources: https://www.ft.com/, https://au.finance.yahoo.com/, https://www.fool.com.au/
Oracle Corporation reported its fiscal 2022 third quarter financial results after the closing bell on Wall Street today. The US software and hardware manufacturer reported revenue of $10.513 billion vs. $10.506 billion expected. Earnings per share at $1.13 per share, falling short of analyst estimate of $1.18 per share.
The company also announced a quarterly cash dividend of $0.32 per share of outstanding common stock "In Q3, Oracle delivered over 7% constant currency revenue growth—our highest quarterly organic revenue growth rate since we began our transition to the cloud," said Oracle CEO, Safra Catz following the latest results. "This strong top line growth was coupled with a solid non-GAAP constant currency operating profit growth of 4%, but the big story is that our overall revenue growth is being driven by both our rapidly growing Cloud Infrastructure and Cloud Applications businesses. Q3 Cloud Infrastructure revenue was up 47% in constant currency. Q3 Cloud Applications growth was led by Fusion ERP, which was up 35% in constant currency and NetSuite ERP which was up 29% in constant currency.
Total Cloud revenue which includes Cloud Infrastructure and Cloud Applications is now over $11 billion a year," Catz added. Oracle Corporation (ORCL) Shares of Oracle were little changed at the end of trading on Thursday, up by 0.84% at $76.70 a share. Here is how the stock has performed in the past year – 1 Month: -6.22% 3 Month: -13.53% Year-to-date: -11.98% 1 Year: +13.87% Oracle is the 49 th largest company in the world with total market cap of $204.85 billion.
You can trade Oracle Corporation (ORCL) and many other stocks from the NYSE, NASDAQ, HKEX and the ASX with GO Markets as a Share CFD. Trading Derivatives carries a high level of risk. Sources: Oracle Corporation, TradingView, MetaTrader 5, CompaniesMarketCap