Barclays sees 13–14 million bpd oil supply loss from prolonged Hormuz disruption

Group 1 - Barclays estimates a potential oil supply loss of 13-14 million barrels per day due to a prolonged closure of the Strait of Hormuz, highlighting significant uncertainty regarding the duration of this disruption [1][2] - The International Energy Agency projects global oil demand for the year to be around 104-105 million barrels per day, indicating that the supply disruption could have substantial implications for the market [2] - The ongoing conflict involving Iran has created the largest geopolitical shock to energy markets since the 1990 Gulf War, driven by tight spot fundamentals rather than speculative activities [3] Group 2 - Barclays anticipates that if traffic through the Strait of Hormuz normalizes by early April, Brent crude prices could average $85 per barrel in 2026; however, if disruptions continue until the end of April, prices could rise to $100 per barrel, and potentially to $110 if the situation extends to the end of May [4] - The closure of the Strait of Hormuz has resulted in oil prices exceeding $100 per barrel, with Brent futures trading at $104.36 and U.S. West Texas Intermediate crude at $92.23 [5] - Barclays notes that supply elasticity is weaker than in previous shocks, with OPEC+ spare capacity under-delivering and U.S. non-OPEC+ growth slowing due to years of under-investment [6]