Strait of Hormuz has been closed for 100 days, but oil prices stay low

At a glance:

• The Strait of Hormuz has been effectively shut for over 100 days, cutting Arabian Gulf crude shipments by about 95 %.
• Brent crude remains around $87 per barrel thanks to large stockpiles in China and other buffer supplies.
• Analysts warn that once these buffers run low, prices could swing dramatically, especially if the strait reopens or Iraq ramps up exports.

What happened

Last week former President Donald Trump claimed that a secret U.S. mission moved 100 million barrels of oil through the Strait of Hormuz while the waterway was blockaded. The statement landed in a market already scrambling to quantify how much oil is actually getting out of the chokepoint. "No one’s experienced this kind of disruption," said Matt Stanley, head of market engagement at commodity‑intelligence firm Kpler. The difficulty stems from what the industry calls dark trade—vessels that turn off AIS transponders, travel at night, hug the Omani border, and sometimes receive naval escorts.

Why prices aren’t higher

Even though the strait is the world’s most important oil chokepoint, Brent crude sits at $87.55 per barrel, the lowest level since before the conflict began. The International Energy Agency (IEA) calls the situation “the largest supply disruption in the history of the global oil market,” yet buffers are softening the shock. China alone holds roughly 1.3 billion barrels in storage and is drawing down at about a million barrels per day. Stanley notes that Chinese demand fell from 12.5 million barrels per day in December to about 7 million barrels per day during May‑July. The United States, Brazil and Canada have also stepped in to fill part of the void, keeping the market from a price spike.

Buffer stocks and future risk

Three analysts interviewed agree that the market’s response has been robust, but they warn the safety net is finite. Iman Nasseri, managing director for the Middle East at FGE NexantECA, says the industry is approaching “operationally critical levels” where stored oil and additional supply must be replenished. The U.S., currently acting as a swing producer, faces its own deadline as the year ends and will need to prioritize domestic production for heating demand. Stanley predicts the market hopes to see a resolution by mid‑August, but the consensus is that once buffers run low, price volatility could return.

Timeline for reopening

Global oil supply fell by 10.1 million barrels per day in March, with OPEC+ output dropping 9.4 million barrels per day month‑on‑month. S&P Global CERA estimates that fields shut for two months may need 10 weeks to seven months to restart. IEA executive director Fatih Birol says more than 80 energy facilities have been damaged, and full recovery could take up to two years. The UAE’s national oil company projects that normal Hormuz flows won’t resume until 2027. Stanley adds that basic infrastructure—vessel services, inspection, even husbandry—has stalled, and it could take three months just to get operations back up and running.

Potential market swing

A rapid, clean resolution carries its own risk. "If oil isn’t at $200 because supply has been sourced from elsewhere, and then the strait reopens and all this oil is now available—prices are in danger of getting to $50," Stanley warned. Iraq, which has been starved of revenue for months, could export aggressively the moment it can, forcing OPEC or a new Middle‑East‑focused body to manage the surge. The market is watching closely: a sudden influx of Hormuz‑origin crude could depress prices, while a prolonged closure could push them higher once buffers are exhausted.