Brent Crude (Today)
$108.78
▲ +$37.78 since Feb 27 (+53%)
Daily Transits (Pre-Crisis)
153
Now: ~2-13 per day
Vessels Struck
20+
Since March 1, per UKMTO
War Risk Premium
5%
of hull value — was 0.05%
Global Oil Disrupted
~20%
20M bpd normally transits
VLCC Charter Rate
$800K
/day — quadrupled in 1 week
I. What Happened
18 Days That Shook the Oil World
On February 28, 2026, the United States and Israel launched coordinated airstrikes on Iran under Operation Epic Fury. Within 48 hours, the Strait of Hormuz — through which 20% of global oil passes daily — was effectively shut. This is the largest disruption to global energy supply since the 1970s.
15–20 FEB 2026
Pre-strike surge: Iran tripled its oil export rate and drained storage. Saudi Arabia made similar moves. War-risk premiums jumped from 0.125% to 0.2–0.4% of vessel value.
28 FEB 2026
Operation Epic Fury launched. US and Israeli forces struck military facilities, nuclear sites, and leadership targets across Iran. Supreme Leader Khamenei killed. Brent jumped 8% overnight from $71.32 to $77.24.
1–2 MAR 2026
Iran retaliates. IRGC declares Strait "closed" — any vessel attempting passage will be "set ablaze." Five commercial ships struck within 24 hours. AIS signals drop to zero at midnight. Traffic plunges from 153 transits/day to 13.
3–5 MAR 2026
Insurance collapses. P&I war risk policies voided from March 5. Lloyd's Joint War Committee expands war zone (JWLA-033). Economic risk becomes too high — strait is "technically open but effectively closed." Trump orders DFC political risk insurance for all maritime trade.
4 MAR 2026
QatarEnergy declares force majeure on all LNG shipments after Iranian drones strike Ras Laffan facilities. European gas prices nearly double. IRGC claims "complete control" of the strait.
8–12 MAR 2026
Brent breaks $100 for the first time since 2022. At least 16 vessels struck in total. Total transit since war began: just 21 tankers (vs. ~2,700 normally). Saudi Arabia begins redirecting crude to Yanbu via Petroline. Maersk, MSC, CMA CGM, Hapag-Lloyd all suspend Hormuz transits.
13–18 MAR 2026
Selective passage begins. Iran allows Turkish, Indian, and some Chinese-linked vessels with permission. Two Indian LPG carriers and one Saudi tanker cleared. But most traffic remains frozen — only 2 crossings recorded on March 16. Brent hits $108.78 today. 55 Chinese ships remain trapped in the Persian Gulf.
II. Traffic Collapse
From 153 Transits a Day to Nearly Zero
AIS tracking data from Starboard Maritime Intelligence and S&P Global shows the most dramatic shipping collapse ever recorded at a major chokepoint. The strait averaged 153+ daily transits before the conflict. By March 2, that number was 13.
Who Is Getting Through?
Iran announced on March 5 it would keep the strait closed only to ships from the US, Israel, and Western allies. In practice, passage is permission-based and highly selective:
Iranian-flagged/linked vesselsPermitted
Chinese-linked commercial shipsLimited
Indian government vesselsPermitted (2 LPG)
Turkish vessels (with Iranian port calls)Case-by-case
US / UK / Israel-linked flagsBlocked / Targeted
All others (bulk, container, tanker)Frozen (no insurance)
AIS Dark Activity: Vessels are running the strait with transponders off. The Chinese container ship Run Chen 2 went dark near the western mouth at 9:30 PM on March 1, reappearing in the Gulf of Oman at 4:20 AM. Iranian VLCCs are operating in 15+ day AIS blackouts.
Strait Transit Composition — Before vs. During Crisis
III. The Price Shock
Brent Crude: $71 → $126 in 10 Days
The IEA calls this "the largest supply disruption in the history of the global oil market." Brent surged 53% in under three weeks, briefly touching $126 before settling around $108. The EIA has revised its 2026 average Brent forecast from $57.69 to $78.84/bbl.
"I don't think it's ridiculous at all to be $200." — Greg Newman, Group CEO, Onyx Capital Group, on where oil could go if the strait remains closed.
EIA Forecast (March STEO)
$78.84/bbl
2026 annual average Brent — up from $57.69 last month. Q2 avg: ~$91. Falls to ~$70 by Q4 if flows resume.
Goldman Sachs
$100+ Mar
Expects Brent to average $100+ in March, $85 by April, dipping to $90 by June and $71 Q4. Models 21 days of disruption + 30-day recovery.
UBS
$90 Jun
Expects $90/bbl by end of June (up from $65 prior), $85/bbl by year-end. Emphasizes structural tightness if conflict extends.
IV. Predictive Scenarios
6-Month Oil Price Forecast: Three Scenarios
Synthesizing EIA, Goldman Sachs, UBS, and IEA data with historical patterns from the 1987-88 Tanker War, the 1990 Gulf War supply shock, and the 2019 Abqaiq drone attack, we model three probability-weighted scenarios.
40%
Scenario A: Managed De-escalation
Naval escorts restore partial traffic within 4–6 weeks. US/coalition patrols establish safe corridors. Insurance gradually reinstated. Iran shifts to selective enforcement. OPEC+ fills gaps.
Brent Q2: $88–95
Brent Q3: $75–85
Brent Year-End: $68–75
35%
Scenario B: Prolonged Disruption
Strait remains effectively closed for 8–12 weeks. Sporadic attacks continue. Insurance stays withdrawn. SPR releases provide temporary relief but don't solve logistics. Bypass pipelines max out at 4-5M bpd — covering only 25% of lost flows.
Brent Q2: $100–120
Brent Q3: $90–105
Brent Year-End: $80–90
25%
Scenario C: Escalation Spiral
Conflict widens. Iran targets Saudi/UAE energy infrastructure. Houthis resume Red Sea attacks (both chokepoints blocked simultaneously). Mine-laying in the strait. Oil infrastructure hit. Global recession trigger.
Brent Q2: $130–200
Brent Q3: $110–160
Brent Year-End: $95–130
Probability-Weighted Brent Forecast (Mar–Sep 2026)
V. Winners & Losers
The Geopolitical Scoreboard
The strait isn't just a waterway — it's a global inflation lever. Every nation's exposure depends on its energy import dependency, refining capacity, strategic reserves, and diplomatic positioning.
| Country / Bloc |
Exposure |
Impact |
Key Data |
| China |
Critical |
Imports 40% of oil and 30% of LNG through Hormuz. 55 ships trapped in Gulf. Only 2 Chinese-flagged ships transited since March 1. |
55 vessels stranded |
| India |
Severe |
Massive energy importer. Negotiating vessel-by-vessel passage. Two Indian LPG carriers cleared. LPG cooking fuel supply at risk for hundreds of millions. |
Navy deployment proposed |
| Japan & S. Korea |
Severe |
Heavily reliant on Gulf crude. Japan sourced ~90% of oil via Hormuz. S. Korean refiner GS Caltex chartering VLCCs at $440K/day from Yanbu as emergency measure. |
90% supply dependency |
| Europe (EU) |
High |
30% of diesel and 50% of jet fuel imports from Middle East. Gas prices nearly doubled. Italy, Greece, Spain, Poland most exposed. France deploying frigates. |
Gas prices 2x |
| United States |
Moderate |
Energy independent but sensitive to global price contagion. Gasoline projected at $3.50/gal. Goldman: inflation becomes "permanent problem." SPR at 415M barrels. Fed rate cuts in jeopardy. |
SPR: 415M bbl |
| Russia |
Beneficiary |
High oil prices boost revenue. Attention diverts from Ukraine. India now competing with China for Russian crude — tankers turning mid-voyage. Revenue windfall funds war chest. |
+$38/bbl premium |
| Gulf States (Saudi/UAE/Qatar) |
Critical |
Paradox: sky-high prices but can't export. Gulf producers have lost $15B+ since war began. Production cut by 10M+ bpd involuntarily. UAE Ruwais refinery closed after attack. Qatar LNG under force majeure. |
-$15B+ losses |
| Tanker Operators |
Mixed |
VLCC spot rates quadrupled to $800K/day. But 150+ tankers stranded — unable to load or transit. War risk premiums at 5% of hull value ($5M per voyage for $100M vessel). Win for those outside the zone; catastrophe for those inside. |
$800K/day VLCC |
| Egypt |
Severe |
Suez Canal revenue declining despite rerouted traffic. Higher oil imports strain economy. World Bank estimates ~$10B in losses. Near state of emergency against price-gouging. Military courts threatened. |
~$10B Suez losses |
VI. The Insurance Collapse
No Insurance = No Shipping
The real chokepoint isn't geography — it's insurance. When Lloyd's Joint War Committee voided P&I war risk policies from March 5, vessels became economically unable to transit regardless of physical access. Bloomberg reports current coverage at 5% of hull value — 100x pre-crisis levels.
War Risk Premium: Before vs. Now
War Risk Premium (% of hull)
0.02–0.05%
1–5%
▲ 100x
VLCC Single Transit ($100M vessel)
$40,000
$1M–$5M
▲ 25–125x
Cargo Insurance
Baseline
+150–200%
▲ 2.5–3x
Hull & Machinery
Baseline
+80–120%
▲ 1.8–2.2x
VLCC Charter Rate ($/day)
~$200K
$800K
▲ 4x
Why Ships Won't Move
The shipping industry operates on a layered insurance framework. Without it, no port authority, charterer, bank, or regulator will clear a vessel. Here's the chain that broke:
1. Lloyd's JWC expanded war zone (JWLA-033) → Strait declared high-risk
2. P&I clubs voided war risk coverage from March 5
3. Charterers won't book uninsured tonnage
4. Crew unions invoke right of refusal (high-risk zone pay)
5. Banks refuse letters of credit for uninsured cargo
6. Result: Strait "open" in theory, closed in practice
VII. The Bypass Question
Can We Route Around Hormuz?
Total bypass pipeline capacity: 3.5–5.5M bpd. Normal Hormuz flow: 20M bpd. The math is brutal — at best, alternatives cover 25% of lost flows. And Iran has already targeted the exit points.
Saudi Petroline (East–West Pipeline)
Abqaiq → Yanbu (Red Sea) • ~750 miles
Design capacity: 7M bpd (expanded 2025)
Pre-crisis use: ~2M bpd
Current output: 2.2M bpd (Mar avg) — record, heading to 4M+
Export capacity: 5M bpd for export, rest feeds western refineries
Yanbu bottleneck: Terminal rarely handled >2.5M bpd. Charter rates to Yanbu doubled. 37–40 tankers expected this month — near handling limit.
Critical limitation: Only services Saudi crude (Arab Light). Doesn't help Iraq, Kuwait, Qatar, or UAE's heavy grades. Red Sea route still passes through Bab el-Mandeb — exposed to Houthi threats.
UAE ADCOP (Habshan–Fujairah)
Habshan → Fujairah (Gulf of Oman) • ~248 miles
Capacity: 1.5–1.8M bpd
Pre-crisis use: ~1.1M bpd
Spare capacity: ~700K bpd
Status: Fujairah oil terminal hit by drone debris on March 3 — JSW Infrastructure tank (3M barrel capacity) damaged. Fire at Ruwais refinery forced closure.
Iran is targeting the exit ramps. Drones struck Duqm port on March 1 and 3. Fujairah terminal hit March 3. GPS jamming across UAE coastal waters documented March 4. Iran has mapped and attacked the bypass infrastructure.
Iraq's Kirkuk–Ceyhan Pipeline
Northern Iraq → Ceyhan, Turkey (Mediterranean)
Capacity: ~1.6M bpd (theoretical)
Current status: Closed/limited due to political disputes and security issues
Relevance: Only handles northern Iraqi production — not Gulf crude
Note: Could provide Mediterranean export route if reactivated
Iran's Goreh–Jask Pipeline
Goreh → Jask (Gulf of Oman)
Capacity: ~300K bpd (some claim up to 1M bpd)
Status: Effectively non-operational — only 1 test shipment in late 2024
New development: Iran used Kooh Mobarak terminal on March 8 — 1.77M barrels shipped to China. First recorded use in 2026. AIS blackout for 15+ days after departure.
The Engineering News-Record verdict: "Bypass infrastructure was sized for a short disruption. This is not that." For four decades, Gulf producers bet any closure would be temporary. That assumption is now failing. Refined products — diesel, jet fuel, LPG — have zero pipeline bypass. 30% of Europe's diesel and 50% of its jet fuel came from the Middle East entering 2026.
VIII. Maritime Sector Shockwaves
Impact on Global Shipping
This crisis has simultaneously disrupted both Middle East chokepoints for the first time in modern history. The Red Sea route (already at 49% capacity from Houthi attacks) and Hormuz are both compromised.
Carrier Responses
Maersk: Suspended all Hormuz transits. Using Suez Canal from January 2026. Emergency Contingency Surcharge of $600/container on Red Sea routes.
MSC, CMA CGM, Hapag-Lloyd: All suspended Hormuz voyages.
Container rerouting: Of 81 container vessels bound for Hormuz ports when war began, 43 rerouted to other Gulf ports, rest diverted from region entirely.
Cargo redirection: Fujairah, Khor Fakkan (UAE), and Oman's Sohar receiving diverted cargo — then moved by truck to final destinations.
Beyond Oil: What Else Is Stranded
LNG: Qatar (20% of global LNG) under force majeure. European and Asian spot prices nearly doubled.
Sulfur: Gulf countries supply 45% globally. Fertilizer, copper mining, sulfuric acid all disrupted.
Helium: Critical for semiconductor manufacturing. Gulf is major producer.
LPG: Cooking/heating fuel for India, East Africa at risk. Petrochemical plants curbing polymer production.
Food: Gulf states import 80–90% of food needs. Over 20% of imports by tonnage are food and live animals.
Shipping Route Traffic Shifts (Relative Change Since Feb 28)
IX. Historical Context
This Has Never Happened Before
Even during the 1987–88 Tanker War, oil continued flowing. The 1990 Gulf War disrupted ~4.3M bpd. This crisis has removed ~20M bpd from transit — nearly 5x larger than any previous disruption.
Data Sources & References
Data compiled from: U.S. Energy Information Administration (EIA) Short-Term Energy Outlook, March 2026 •
International Energy Agency (IEA) Oil Market Report, March 2026 •
CSIS analysis (Harrison Prétat et al.), March 6 2026 •
Windward Maritime AI Platform daily intelligence reports •
S&P Global Market Intelligence vessel tracking •
Starboard Maritime Intelligence AIS data •
Kpler / MarineTraffic ship tracking •
Bloomberg vessel-tracking data •
Lloyd's of London war risk data •
Goldman Sachs Research • UBS Research • Citi Research •
CNBC reporting (March 12–18, 2026) •
Al Jazeera, Reuters, Euronews reporting •
U.S. Congressional Research Service Report on Iran Conflict •
Engineering News-Record infrastructure analysis •
Just Security legal analysis (Mark Nevitt) •
This briefing is for informational purposes only. Oil price forecasts are probability-weighted estimates based on analyst consensus and historical modeling. Not financial advice. Data as of March 18, 2026.
