How long will Strait of Hormuz tanker crisis keep oil prices rising?
Fitch says disruption may be temporary as global supply and stockpiles cushion markets
Dubai: Escalating tensions around the Strait of Hormuz have disrupted tanker traffic and driven oil prices higher, raising concerns for global energy markets and Gulf trade routes.
Credit ratings agency Fitch Ratings says the disruption is unlikely to last long despite the current shipping squeeze.
Angelina Valavina, EMEA head of natural resources and commodities at Fitch Ratings, said the situation represents an “effective closure” of the strait as shipping companies avoid the route due to security risks.
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Tanker traffic drops sharply
The crisis began after the outbreak of conflict involving Iran on February 28.
Ship-tracking data shows tanker traffic through the strait has fallen sharply.
Hundreds of vessels have remained outside the waterway or rerouted to avoid attacks.
Some ships have been damaged in strikes linked to the conflict.
The Strait of Hormuz is one of the world’s most important energy chokepoints. About 20 million barrels of crude oil and petroleum products move through the strait each day, accounting for roughly a quarter of global seaborne oil trade and around 20% of global consumption.
Exports from Gulf producers dominate those flows:
Roughly half come from Saudi Arabia and the UAE
The rest mainly from Iraq, Kuwait and Iran
China and India receive about half of these shipments
Fitch: Closure unlikely to last
Fitch expects the disruption to be temporary because of the strait’s economic importance. Valavina said “the effective closure of the Strait of Hormuz… is likely to be temporary given its vital economic role.”
She added that market fundamentals should limit any sustained price surge. “This, alongside global oil market oversupply, should limit oil price rises and mitigate any potential disruptions to Iranian oil supply.”
Fitch still expects limited changes to its long-term price outlook. “We do not expect significant upside to our December 2025 assumption of an average Brent oil price of $63 per barrel for 2026.”
Global supply remains strong
Oil markets entered the crisis with surplus supply. Key figures cited by Fitch:
Global oil supply rose about 3 million barrels per day in 2025
Demand growth was well below 1 million barrels per day
Supply is forecast to grow another 2.4 million barrels per day in 2026
Demand is expected to increase by around 0.8 million barrels per day
Half of the new supply comes from non-OPEC+ producers unaffected by Middle East tensions. OPEC+ also holds around 4.3 million barrels per day of spare capacity, creating an additional buffer.
Oil stockpiles provide cushion
Global inventories also offer protection against prolonged disruption. Oil stocks reached about 8.2 billion barrels by the end of 2025, the highest level since March 2021.
Fitch estimates these reserves could cover more than 400 days of halted shipments through the Strait of Hormuz if needed.
Key pipelines reduce dependence
Gulf producers also operate infrastructure that bypasses the strait.
Saudi Arabia runs the East-West pipeline, capable of transporting about 5 million barrels per day to Red Sea export terminals.
The UAE operates a pipeline linking onshore oil fields to Fujairah on the Gulf of Oman, with capacity of 1.5 million barrels per day and peak flows of 1.8 million barrels per day.
These routes allow some exports to continue without passing through the narrow waterway.
Risks remain if conflict expands
Iran produces about 3.5 million barrels per day, exporting roughly 2 million barrels daily, equivalent to about 3.5% of global crude supply.
Fitch said global oversupply could offset potential disruptions from Iranian production. The agency also warned that uncertainty remains around the scale and duration of the conflict.
A prolonged blockage of the Strait of Hormuz or damage to regional energy infrastructure would significantly tighten global oil markets and push prices higher.
