SEATTLE (Oil Monster): The global oil market is facing its largest supply disruption in history as the ongoing Middle East conflict severely restricts crude flows through the Strait of Hormuz, according to the March 2026 Oil Market Report by the International Energy Agency.
Crude and refined product shipments through the waterway have plunged from nearly 20 million barrels per day (mb/d) before the conflict to minimal levels. With limited alternative export routes and storage facilities nearing capacity, Gulf producers have cut oil output by at least 10 mb/d. Without a rapid restoration of tanker traffic, supply losses could increase further.
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Global oil supply is expected to drop by about 8 mb/d in March. However, increased output from non-OPEC+ producers such as Kazakhstan and Russia is partially offsetting the decline. Overall, world oil supply is projected to grow by around 1.1 mb/d in 2026, driven entirely by non-OPEC+ producers.
Oil product markets are also under pressure as exports stall. Over 3 mb/d of regional refining capacity has shut down due to attacks and lack of export options.
Meanwhile, IEA member countries agreed on March 11 to release 400 million barrels from emergency reserves to stabilize markets.
Oil prices surged after joint strikes by the United States and Israel on Iran on February 28, pushing Brent crude oil close to $120 per barrel before easing to around $92.
