US Energy Agency: Conflicts continue to curb the supply of crude oil for shipping in the Strait of Hormuz and will continue until 2027

The Zhitong Finance App learned that the US currently expects that due to the conflict continuing to curb traffic through the Strait of Hormuz, the oil supply interruption caused by the Middle East War will continue until the end of next year, at a scale of about 600,000 barrels per day. According to estimates from the US Energy Information Administration (EIA) short-term energy outlook, the average amount of oil transported through this waterway in the second quarter of this year was 4.9 million barrels per day. By contrast, in the fourth quarter of 2025, before the US and Israel launched an attack on Iran, this figure averaged 21.6 million barrels per day.

These data show that the brief intermission of fighting during the signing of the so-called memorandum of understanding did little to mitigate the impact of one of the worst disruptions in the history of the global energy market. Although officials say negotiations are progressing, an agreement between Iran and Oman to reopen the strait is still difficult to reach. Furthermore, Iranian Foreign Ministry spokesman Bagae said earlier that the United States' imposition of a maritime blockade and military action against Iran is a major obstacle to the complete restoration of safe navigation in the Strait of Hormuz. Bagae stressed that as long as the United States does not stop its naval blockade and military operations, the Strait of Hormuz will not have the conditions to fully resume safe navigation.

Meanwhile, US President Trump made a series of new broad demands on Iran on Monday, including demanding that Iran pay compensation to those who died as a result of the action against Iraq. These conditions are likely to be rejected by Iran. The positions of the two sides are getting tougher, which means that reaching an agreement to reopen the Strait of Hormuz may require a longer tug-of-war process, which also weakens the market's hopes that aluminum supply in the Middle East will return to normal.

Meanwhile, according to the latest reports, on August 11 local time, Pakistan's Defense Minister Asif said that the US and Iran are close to reaching “some kind of arrangement.” In an interview, Asif said that the situation is once again moving in a direction conducive to reaching a peace arrangement or agreement. “The signals sent over the past two or three days indicate that we are close to reaching some kind of arrangement.”

As the conflict enters its sixth month, global consumers are once again facing the prospect of rising fuel prices and rising inflation. The US Energy Information Administration raised the 2026 gasoline and diesel price forecasts by 3.7% and 5.4%, respectively, and raised the 2027 retail gasoline price forecast by 6.5% from the estimate a month earlier.

The amount of oil transported through the Strait of Hormuz is still difficult to determine in real time, as ship shutdown signals obscure shipping activities, leading to differences in estimates among market participants. According to US Secretary of Energy Chris Wright, an average of about 9 million barrels of oil were shipped from the strait every day over the past week.

Several Middle Eastern countries have been forced to cut production due to limited shipping capacity to global markets and a reduction in available storage capacity. However, the US Energy Administration estimates that production stoppages in the Middle East eased somewhat in July, averaging around 5.5 million barrels per day, compared to 7.5 million barrels per day in June. However, the agency also predicts that the amount of oil discontinued in the Middle East will expand again to 6.6 million barrels per day in the third quarter.

The report also assumes that recent threats against ships transporting Saudi crude oil through the Mander Strait have not led to additional production stoppages. If this hypothesis holds true, the agency anticipates that most production and trade flows will not return to pre-war levels until early 2027.

International oil prices have repeatedly jumped

As of press release, Brent crude oil futures rose 0.89% to $89.70 per barrel; WTI crude oil futures rose 1.06% to $84.08 per barrel.

In the past period, the market originally bet on the restoration of navigation and mitigation of supply risks in the Strait of Hormuz, but the latest news has once again repeated expectations. The most critical issue of navigation in the Strait of Hormuz remains unresolved. There is a fundamental difference between the US and Iran's claims about the strait — Iran wants to control the strait and charge service fees, while the US demands free and barrier-free passage. Currently, Iran is mainly advancing negotiations with Oman. Any news of the progress or breakdown of negotiations directly triggers wide fluctuations in oil prices in a single day, and news-driven wide shocks cannot be eliminated in the short term, and even if an interim agreement is reached, it may lapse at any time. The US and Iran once reached a memorandum of understanding in June, but it completely expired within a few weeks.

According to data from ship tracking agency Kepler, traffic in the Strait of Hormuz has been “sluggish” for the past week, and declined further this past weekend — 15 ships passed through the strait on August 7, dropped to 11 on August 8, and dropped to 6 on August 9.

As the prospects for the US-Iran negotiations are uncertain, and the Strait of Hormuz is still the focus of conflict, international oil prices are repeatedly fluctuating in the absence of new information and guidance. In the short term, geopolitics will remain the main focus of the crude oil market. Some analysts have pointed out that the basic condition for oil prices to escape from the volatile range is that geopolitical influence weakens, but it is difficult for the global geopolitical landscape dominated by the US to return to the relatively stable state of the past.

Inventory risk

Meanwhile, declining global crude oil inventories are sounding the alarm. Geopolitics triggered a reduction in global crude oil production and the release of strategic oil reserves by International Energy Agency (IEA) member countries, causing global crude oil inventories to continue to decline, further increasing concerns about supply shortages.

According to the latest data released on August 10, the US strategic oil reserves (SPR) fell by about 6.1 million barrels to 298.3 million barrels in the week ending August 7, not only falling below the 300 million barrels mark, but also once again hitting the lowest level since 1983, approaching the lowest record of 270.5 million barrels set in April 1982.

The global crude oil inventory buffer is in a historically extremely low state, which has significantly increased price flexibility. US SPR fell to its lowest level since 1983, Cushing inventories continued to fall, and gasoline inventories fell below the five-year lower limit. The impact of any supply disruptions in the context of low inventories is directly transmitted to prices, and even if the Strait of Hormuz is re-navigated, inventory reconstruction will take time. The oil field faces the problem of falling stratigraphic pressure after being shut down for a long time, and it takes time for production to climb.

If the Strait of Hormuz remains in the current tense situation for a long time, there will inevitably be a period of tension in global oil supply next. However, as time progresses, other oil export methods to replace shipping in the Strait of Hormuz will gradually emerge. From the perspective of navigation in the Strait of Hormuz alone, there is little room for maneuver in the short term, but the medium- to long-term oil market room may gradually return to normal or close to normal.