Barclays expects a 13-14 million barrel per day oil supply to be lost due to the prolonged disruption of Hormuz
Barclays stated on Thursday that the closure of the Strait o f 'Hormuz could lead to an estimated 13-14 million barrels of oil per day. They also noted that the disruption was massive, but the duration of it was uncertain.
The bank believes that a disruption in supply of this magnitude is likely if the Strait remains closed for a long time.
The International Energy Agency estimates that world oil demand will be between 104 and 105 million barrels per day this year.
Barclays said that the Iran War has caused the biggest geopolitical shock in energy markets since 1990's Gulf?War. This was driven by tight spot fundamentals, rather than excessive speculation.
Donald Trump, the U.S. president, has stated that Iran is desperate to make a deal in order to end the nearly four-week conflict. This contradicts the statement of the Iranian foreign minister which said his country was evaluating a U.S. offer but did not intend to hold talks to bring the conflict to an end.
In a recent note, Barclays said that despite the uncertainty surrounding the ceasefire negotiations we expected traffic to return to normal by early April. This would be consistent with Brent reaching an average price of $85/b per barrel in 2026.
If disruptions continue until the end of April, 2026 Brent futures could be re-priced to $100 per barrel. In a longer scenario, prices could reach $110 by end-May.
Iran has blocked the "Strait Of Hormuz", securing a fifth or more of the world's oil supplies and liquefied gas. Crude oil prices have risen to $100 per barrel, which is causing sticker shock for petrol users.
Brent crude futures were trading at $104 a barrel at 0647 GMT. U.S. West Texas intermediate crude?futures, on the other hand, were at $92.30 a barrel.
Barclays?also stated that supply elasticity 'is structurally weaker compared to past shocks. OPEC+ spare capacities are under-delivering, and non-OPEC+, led by the U.S. growth is steadily slowing down due to years under-investment. (Reporting by Swati Verma in Bengaluru. Mark Potter (Editing)
(source: Reuters)
