Brent tops $107 amid Strait of Hormuz disruption

Brent crude pushed above $107 a barrel on May 14 as traders weighed fresh shipping disruptions around the Strait of Hormuz against only limited signs of resumed traffic. Reuters market pricing carried by Business Times showed Brent touched $107.13 intraday before settling at $105.72, while U.S. crude settled at $101.17. (businesstimes.com.sg) The move came as attacks on one ship and the seizure of another kept attention on the flow of oil and products from the Gulf. The price action followed weeks of war-related disruption that the International Energy Agency and the U.S. Energy Information Administration have both described as historically large. (iea.org) (eia.gov) ### How much oil normally moves through the Strait of Hormuz? The International Energy Agency says about 20 million barrels a day of crude oil and oil products moved through the Strait of Hormuz in 2025. The waterway handles roughly 25% of global seaborne oil trade, with China, India and Japan among the biggest buyers of barrels crossing it. The IEA says Saudi Arabia and the United Arab Emirates have some routes that bypass the strait, but alternatives are limited. The agency estimates only 3.5 million to 5.5 million barrels a day of crude export capacity can be redirected through those routes. (businesstimes.com.sg) ### What has the disruption done to actual flows? The IEA said crude and oil product flows through the strait fell from around 20 million barrels a day before the war to just over 2 million barrels a day in March. Alternative exports from Saudi Arabia’s west coast and the UAE’s Fujairah terminal increased, averaging 6.4 million barrels a day in March from 3.9 million in February, but that did not offset the loss. (iea.org) The same IEA update said Gulf countries had cut total oil production by more than 14 million barrels a day because traffic remained severely disrupted, bypass capacity was limited and storage was filling up. Fatih Birol, the IEA’s executive director, said in March that the war had created “a major energy crisis” and the largest supply disruption in the history of the global oil market. (iea.org) ### Why did Brent spike if some ships are moving again? Iran’s state media said about 30 vessels crossed the strait from the evening of May 13, according to Reuters reporting carried by Business Times. That was still well below the typical daily total of about 140 vessels before the war, and the same report said attacks and seizures were continuing. (iea.org) Tim Snyder, chief economist at Matador Economics, said traders were trying to judge whether Iran was allowing limited passages without changing the broader supply picture. The White House said President Donald Trump and Chinese President Xi Jinping agreed in Beijing that the Strait of Hormuz must remain open for the free flow of energy. (iea.org) ### Why are diesel and other fuels tightening faster than crude? The IEA said refined products such as diesel, jet fuel and liquefied petroleum gas had risen even more sharply than crude after the disruption. Its March statement said the loss of Hormuz flows had tightened markets significantly and driven sharper increases in those fuels than in crude itself. (businesstimes.com.sg) The agency’s Middle East market page said diesel and jet fuel benchmark prices more than doubled after the war began on February 28. That matters because refiners and transport buyers need prompt physical supply, and the IEA said physical crude prices had also outpaced futures as buyers scrambled to replace Middle Eastern cargoes. (businesstimes.com.sg) ### What are official forecasters saying now? The U.S. Energy Information Administration said on May 12 that it expected the strait to remain effectively closed through late May, with flows beginning to resume only in late May or early June. The agency estimated shut-in production averaged 10.5 million barrels a day in April and would peak at nearly 10.8 million barrels a day in May as storage limits forced additional cuts. (iea.org) The EIA said daily Brent spot prices reached as high as $138 a barrel on April 7 and averaged $117 in April, the highest monthly average since June 2022. Its next Short-Term Energy Outlook is scheduled for June 9. (eia.gov) (iea.org)