Brent spikes above $95/bbl as Strait of Hormuz disruptions hit exports

Oil and gas markets are reacting to a simple problem with huge consequences — too much energy normally moves through one narrow waterway. When traffic through the Strait of Hormuz gets disrupted, the shock does not stay in the Gulf. It hits crude prices, LNG prices, shipping costs, and then everything downstream that depends on fuel. That is why Brent moving above $95 a barrel matters even if you never trade oil. ### Why is the Strait of Hormuz the chokepoint? The strait is the main outlet for Persian Gulf producers. Before the current disruption, nearly 20% of global oil supply moved through it. On the gas side, the hit is just as serious — the IEA says shipping disruption since early March has removed close to 20% of global LNG supply from the market. ### What changed in the market? The market is pricing scarcity, but also uncertainty. The EIA said Brent averaged $117 a barrel in April, up $46 from February, and daily prices touched $138 on April 7 before easing back. So a print above $95 is not the peak of the panic — it is the sign that even after some adjustment, traders still think the system is tight. ### Why does LNG get hit so fast? (eia.gov) Because LNG is harder to reroute than people think. Wood Mackenzie says the closure removed 1.5 million tonnes a week — about 2.2 bcm — from global LNG supply, equal to 19% of global exports. A lot of that missing fuel would normally go to Asia, especially from Qatar and the UAE, so buyers there have to bid harder for Atlantic cargoes and pay up for longer voyages. ### Why are Asian buyers so exposed? Asia takes most of the Gulf’s LNG. Wood Mackenzie says around 90% of LNG exports from Qatar and the UAE are normally destined for Asia. Japan, South Korea, Taiwan, and China can replace some of that, but not all of it. Japan has more buffer because of nuclear restarts and lower dependence on Qatari supply. South Korea looks tighter, and China has more room to switch fuels because demand is softer and inventories are higher. (woodmac.com) ### Does this just mean higher gas bills? Not just that. It can change the fuel mix. Wood Mackenzie expects demand destruction if disruption lasts, with more coal burn in power generation and lower industrial gas use. The IEA says prices in Asia and Europe jumped to their highest levels since January 2023 during the March shock, reversing the easing that had shown up in the 2025–26 heating season. (woodmac.com) ### Why is this bigger than one bad month? Because the damage is not only today’s missing cargoes. The IEA says the combined effect of short-term losses and slower capacity growth could wipe out around 120 bcm of LNG supply between 2026 and 2030. In plain English — even if shipping resumes, the market can stay tighter for longer because projects, logistics, and trade patterns do not snap back overnight. (woodmac.com) ### What does that mean for the broader economy? Energy is the transmission channel. UNCTAD says ship transits through the strait fell from about 129 a day in February to 6 in March — a 95% collapse. That pushes up fuel and freight costs first, then filters into food, manufacturing, and borrowing costs, especially in import-dependent economies. (iea.org) ### So what is the real takeaway? The real story is not one scary oil print. It is that a disruption in Hormuz turns a regional conflict into a global pricing event. Brent above $95 is the headline, but the deeper signal is tighter LNG, pricier shipping, and a longer stretch of energy insecurity than markets expected a few months ago. (eia.gov) (unctad.org)