Q1: How Long and How Deep Will the Energy Supply Destruction Be?

Executive Summary

The Strait of Hormuz has effectively shut down following the military conflict with Iran that began 28 February 2026, removing ~9.1 million barrels per day (mbd) from global oil markets in April 2026 — equivalent to roughly 20% of global supply — with ship transits collapsing from ~130/day to ~6/day. The EIA projects shut-ins peaking in April 2026 and gradually abating into late 2026 if the conflict resolves quickly, while the Dallas Fed models a multi-quarter recovery timeline with three distinct scenarios. The WTO's AIS tracking confirms the near-complete halt in outbound Hormuz traffic.

Evidence

Hormuz Transit Collapse (WTO)

The WTO Data Lab Strait of Hormuz Trade Tracker uses AIS vessel tracking to confirm:

Crude oil, LNG, and fertilizer outbound traffic from the Persian Gulf halted near-completely from 28 February 2026
Agricultural inbound shipments show lag because cargo already in transit continued discharging at destination ports
Data limitations: AIS-traceable vessels only — actual traffic disruption may be even more severe

Current Shut-In Volume (EIA)

The EIA April STEO is the most operationally current assessment. Key numbers:

**9.1 mbd shut-in** in April 2026
**6.7 mbd** May (partial recovery assumed)
**Brent $115/b Q2 2026 peak**, easing to $76/b in 2027
**Retail gasoline $4.30/gal April peak**; **diesel $5.80/gal April peak**

Partial Workarounds Exist But Are Limited

Saudi Arabia's East-West pipeline to Red Sea (Yanbu) can redirect ~4 mbd, but Red Sea/Bab el-Mandeb routes are also contested
UAE bypass pipeline to Fujairah already attacked
China's negotiated carve-outs with Iran ( tanker deals) provide marginal relief for specific bilateral flows

Sources Used

[EIA April 2026 STEO](https://www.eia.gov/pressroom/releases/press586.php) — Supply shut-in volumes, price forecasts, recovery path
[Dallas Fed: Hormuz Closure Economic Impact](https://www.dallasfed.org/research/economics/2026/0320) — Historical context, GDP scenarios, quarterly price paths
[WTO Strait of Hormuz Trade Tracker](https://datalab.wto.org/Strait-of-Hormuz-Trade-Tracker) — AIS ship transit data
[UNCTAD Rapid Assessment #2](https://unctad.org/news/hormuz-disruption-deepens-global-economic-strain-across-trade-prices-and-finance) — Trade/GDP impact
[EC/ENTSOG Winter Supply Outlook 2025-26](https://energy.ec.europa.eu/news/eu-prepared-winter-and-beyond-confirms-latest-report-european-transmission-system-operators-gas-2025-10-09) — European infrastructure resilience framing

Dallas-Fed-Hormuz-Closure · EIA-STEO-April-2026 · Congressional-Research-Service-Iran-Hormuz · WTO-Hormuz-Trade-Tracker · UNCTAD-Rapid-Assessment-2