Did the world’s oil cushion run out before the Strait of Hormuz could reopen? The report says there is a shortage of 1.15 billion barrels | Today’s news
The Strait of Hormuz has reopened to international shipping after Iran and the US signed a memorandum of understanding this week, but a CNN Business analysis warns the diplomatic breakthrough may come too late to stop a critical shortage of global oil supplies this summer.
Crude did not move freely from the Persian Gulf for almost four months. According to analyst firm Kpler, the war has cost the world about 1.15 billion barrels of oil supplies, a shortfall that has pushed the market to what the outlet describes as a tipping point, even as diplomats celebrate the truce.
Reopening with conditions: fragile peace
US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum on Wednesday night with terms that call for the full reopening of the strait without Iranian charges for at least 60 days.
Read also | The reopening of Hormuz brings relief to the global economy
US Central Command has since lifted restrictions on traffic to and from Iran’s ports and coastal waters, while maritime security officials have advised vessels passing through the strait to skirt the Omani coast to reduce the risk of mines.
US Central Command announced it had lifted restrictions on traffic to and from Iranian ports and coastal waters, while the Joint Maritime Information Center advised vessels passing through the strait to follow a route closer to the coast of Oman to reduce the risk of mines.
Tankers carrying previously stranded oil began leaving the waterway on Thursday, and Kuwait said it would increase output. Tankers carrying previously stranded oil began leaving the waterway on Thursday, and Kuwait said it would begin ramping up output.
Even so, transportation executives warn against expecting an immediate increase. Industry figures told NBC News that cross-strait traffic will return in a trickle rather than a flood, with volumes unlikely to reach pre-war levels for weeks after the deal takes effect.
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The Strait of Hormuz will reopen in a trickle, not a flood. Oil tanker and cargo ship traffic will not return to pre-war levels for weeks after the United States and Iran sign a deal to end the months-long conflict, leading industry experts said.
Missing barrels: the extent of the shortage
The International Energy Agency’s coordinated strategic reserves are at their lowest point since 1990, U.S. emergency stockpiles are at a 43-year low and commercial stocks have reached what the industry calls operational stress.
Speaking at the G7 summit on the same day the memorandum was finalized, Donald Trump expressed the urgency directly. “Do you want to see Bedlama?” he said. “We’ll run out of supplies in about four weeks. He went further, warning of looming “economic disaster” if the strait remained closed, adding that the alternative would invite comparisons with Herbert Hoover, the president whose tenure coincided with the onset of the Great Depression: “There were times when you couldn’t get it (oil).”
Cushing’s stress test: storage nears its limit
Global oil inventories have reportedly fallen by 190 million barrels in recent months, with the Cushing hub in Oklahoma, which supplies fuel pipelines across the country, already under strain.
Analysts liken the situation to the last drops of a coffee pot: what remains at the bottom is largely unusable residue, making it difficult to maintain the pressure needed to keep supplies to customers.
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Tensions have not eased since that assessment; Crude inventories at Cushing, America’s largest storage hub, continued to fall, to around 20 million barrels as of this week. Inventory levels remain tight, with crude inventories at Cushing, America’s largest storage hub, down to around 20 million barrels.
Markets are jumping ahead: prices are already falling
Brent crude fell from a wartime high of $126.41 a barrel to below $80, according to CNN Business. The decline continued into Friday trading, with the benchmark trading near $78 to $79 a barrel, down about 10 percent for the week and about 38 percent from the four-month high it hit in April.
Brent was trading around $79 a barrel on Friday and was on track to fall about 10% for the week. Oil has already fallen 38% since hitting a four-month high in April.
Goldman Sachs revised its outlook accordingly, cutting its fourth-quarter 2026 Brent forecast to $80 a barrel from $90 previously and forecasting an average of $75 for 2027. Goldman Sachs cut its oil price forecast following Trump’s announcement of the deal, cutting its Brent forecast to $80 a barrel for the fourth quarter from $2027 previously. average 2027.
Read also | Trump explains why he made the deal with Iran
Not everyone agrees that retreat is justified. “The market jumped 7 steps ahead of where we are now,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told CNN. “Everybody says: That’s the end!” But there’s a big logistical challenge to get back to where we were.”
Kpler’s Matt Smith shares that skepticism. “Regardless of what happens in the Strait of Hormuz in the coming weeks, American consumers are looking forward to higher prices in the summer months,” he said. “It hasn’t worked out that way yet because of the optimism about the deal. But that’s where market forces have to come into play.”
Counting: why a year, not weeks
The arithmetic, as reported by CNN Business, is ruthless. Even if global production exceeded demand by nearly 5 million barrels a day, the surplus the International Energy Agency currently predicts, it would take about a year to restore the 1.15 billion barrels lost during the Iran-US conflict.
Read also | As the US-Iran war ends, the Pentagon is asking for $80 billion to cover the costs of the conflict
“At some point, physical barrels really matter,” Dan Pickering said. “If you lose those barrels, that matters.
