Brent Crude Tops $90/Barrel

The conflict’s epicenter is the Strait of Hormuz, the world's most critical oil chokepoint, through which about 20% of global oil consumption and 20% of liquefied natural gas (LNG) trade normally passes. The majority of these exports are destined for Asia, with China, India, Japan, and South Korea receiving a combined 69% of the crude oil that transits the strait. Following Iran's effective closure of the strait, commercial traffic has become "virtually nonexistent." Daily vessel transits have plummeted by 94%, down from a daily average of 138 to just eight ships. As a result, hundreds of tankers are stuck in the Persian Gulf, leading Kuwait to cut production as it runs out of storage capacity. In response, an eight-member OPEC+ group agreed to a modest production increase of 206,000 barrels per day starting in April. However, this is seen as a largely symbolic gesture, as the blockade traps the bulk of the alliance's spare capacity—estimated at around 4.5 million barrels per day—which is held primarily by Saudi Arabia and the UAE. Qatar's Energy Minister Saad al-Kaabi predicts crude prices could soar to $150 a barrel within weeks if the strait remains impassable. He anticipates all Gulf energy exporters will be forced to declare force majeure, shutting down production and severely impacting global GDP growth. The disruption has also crippled the global LNG market. Qatar, which accounts for about 20% of the world's LNG supply, halted production and declared force majeure following an Iranian strike on its Ras Laffan processing plant. Minister al-Kaabi stated it would take "weeks to months" to return to a normal delivery cycle even if the conflict ended immediately. The fallout disproportionately affects Asian economies. In 2024, nearly 85% of crude oil and 83% of LNG transiting the Strait of Hormuz was headed to markets in Asia. By contrast, the U.S. receives only about 7% of its crude imports via the strait.