In the early hours of February 28, while flying from New York to Oslo, the chairman of oil producer DNO gave the order to shut down the wells. Israel and the United States had just attacked Iran. The pumps in Iraqi Kurdistan had stopped working by the time the aircraft touched down in Norway. In hindsight, it was one of the first minor indicators of something much bigger—a worldwide energy disruption so severe that those tasked with monitoring it are running out of relevant historical comparisons.
Currently, 20% of the world’s oil is practically inaccessible. Approximately 20 million barrels of crude and oil products passed through the Strait of Hormuz every day in 2025. It is a narrow, incredibly significant strip of water between the Persian Gulf and the Arabian Sea, but it has virtually stopped. What was once a steady stream of tankers has turned into a trickle, though traffic hasn’t completely stopped. Ports continue to receive ships that departed prior to the war. Nothing will be left of them after April.
“As of today, we have lost 11 million barrels per day — more than two major oil shocks put together.” — Fatih Birol, IEA Executive Director, Canberra, March 23, 2026
The head of the International Energy Agency, Fatih Birol, carefully considered what to say while speaking at a podium in Canberra on March 23. Together, the two successive oil shocks of the 1970s—which altered geopolitics and plunged Western economies into recession—removed roughly 10 million barrels per day from the world’s markets. Twelve million have already been displaced by the current crisis. Additionally, Birol cautioned that April would be worse than March because ships that had passed through prior to the war were still present in March. Those ships have since vanished. Nothing comes through the strait in April.
It’s difficult to ignore the fact that, for the most part, the world did not take the Hormuz risk seriously enough to take appropriate action. The strait’s vulnerability has long been noted by energy analysts; on occasion, a government commission would bring it up in a footnote. The question is no longer hypothetical because the event actually occurred. It’s working. It happens right away. It manifests itself in the cost of fertilizer for a farm in Maharashtra, the price of diesel for a trucking company in Germany, and the line that forms at a Nairobi gas station before dawn.
Birol’s suggested solutions, which include lowering speed limits, avoiding flying, working from home, and turning off gas ovens, have the awkward quality of being both perfectly reasonable and insufficient at the same time. About 20% of all member stockpiles, or 400 million barrels, were released from emergency strategic reserves under IEA coordination. An important figure. In any case, Brent crude increased. The reserves were recognized by the market as a delay mechanism rather than a remedy. “This is only helping to reduce the pain,” Birol acknowledged. “It will not be a cure.”
The cure, as he put it, is opening the strait. Everything else is managing a wound while hoping the bleeding slows. In April, the IEA was weighing a second reserve release. Jet fuel and diesel shortages, which first appeared in Asia, are now spreading westward — there’s a sense that European logistics networks are about to absorb a shock they haven’t fully priced in yet. Airlines are already adjusting routes and frequencies. The petrochemical supply chain, which touches almost everything manufactured on earth, is under serious stress. Fertilizer shortages are raising fears about harvests in countries that can least afford them.
What makes this crisis structurally different from the 1970s oil shocks isn’t just scale, though scale matters enormously. It’s the interconnection. In 1973, an oil price spike was damaging and painful. Today, oil flows through supply chains that are longer, more global, and more interdependent than anything the 1970s economy contained. A diesel shortage doesn’t just mean expensive driving — it means port congestion, delayed container ships, empty shelves in supermarkets, fertilizer that doesn’t arrive in time for planting season. The cascade goes places the number alone doesn’t reveal.
Meanwhile, Russia has become an unanticipated beneficiary. Its oil is freely flowing into markets that are desperate for any supply they can find, thanks to pipelines and ports located far from the Persian Gulf. The irony is striking: a crisis that has made Russian crude genuinely desirable has somewhat offset Western sanctions intended to squeeze Moscow’s energy revenues. The fact that India bought Iranian oil in early April for the first time in seven years shows how drastically the typical global energy trade map is changing in real time.
A ceasefire is currently being discussed, along with cautious diplomatic language regarding the opening of the strait and monitoring procedures. Whether any of it will hold or whether the harm already done to long-term energy investment choices can be readily undone is still up in the air. Businesses that rerouted exploration budgets or halted drilling programs don’t just go back overnight. Disruptions of this magnitude typically leave structural imprints that last long after the news cycle ends because the oil market has a long memory.
As all of this takes place, there’s a sense that the world economy is learning a lesson it didn’t want to learn: that the physical geography of energy supply, the actual ships traveling through actual water, is extremely important and continues to be stubbornly fragile. It is not a statistic that 20% of the world’s oil is trapped in the Persian Gulf. It is a queue of tankers going nowhere, a price board flipping upward at a petrol station in a city you’ve never heard of, and a very old truth reasserting itself with considerable force: geography is not optional.
