Iran War Disrupts 1 Billion Barrels of Oil Supply, Strains Global Inventories

The U.S.-Israeli strikes on Iran that began Feb. 28 have triggered the worst oil supply disruption in history, erasing 1 billion barrels of crude and condensate output through end-May, Kpler data showed. Some 10 million barrels per day of global production were removed as the Strait of Hormuz was de facto closed, collapsing transit traffic by roughly 90% and forcing Middle East producers to shut in output. Excluding China’s large buffer, global onshore stocks are now drawing at an accelerating 1.7 million bpd, signaling further tightness. Benchmark oil prices have found a higher floor amid violent daily volatility, while Asian buyers face physical supply shortages. Shipping routes have been reshaped: Saudi Arabia is exporting via its Red Sea port of Yanbu, and the UAE is expanding capacity outside the Strait. Tanker rates have spiked, and dark-mode transits—ships turning off transponders—have spread to commercial cargoes, complicating real-time tracking. Qatar halted LNG production on March 2 and warned its export capacity may need up to five years to recover after Iranian missile strikes damaged the Ras Laffan complex.