Every industry has a scenario it plans for but does not expect. For the oil and gas business, the closure of the Strait of Hormuz was that scenario, and in 2026 it happened. The International Energy Agency described the resulting fall in supply as the largest disruption in the history of the oil market. This article sets out what it has meant, in the IEA's own figures, and what it has taught the industry about energy security and risk management.
It does not take a view on the conflict that caused it. The purpose is to understand the mechanics of the shock, because the mechanics are what energy professionals have to manage.
The IEA calls it the largest disruption in the history of the oil market. The numbers explain why.
The scale of the shock
In the IEA's April 2026 Oil Market Report, global oil supply fell by 10.1 million barrels a day in a single month, to 97 million barrels a day. Tanker movements through the Strait were restricted, and infrastructure in the region was damaged. By May, cumulative losses since February had reached 12.8 million barrels a day. World output stood at 94.5 million barrels a day, 13.6 million below its pre-conflict level.
A partial resumption of flows in June brought supply back to 98.8 million barrels a day. Renewed attacks in the Gulf and the Red Sea then reversed part of that recovery.
As of the September report, more than ten million barrels a day of Gulf production remained shut in. The IEA now expects world supply to average 100.7 million barrels a day in 2026, down 5.7 million barrels a day on the previous year, with a full recovery in Middle East supply deferred to 2027.
How the market absorbed it
A loss of that size could not be replaced. It was absorbed, in four ways, each of which is a lesson in how energy security actually works.
First, stocks. Observed global inventories, including oil on water, were drawn down by 250 million barrels in March and April alone — roughly four million barrels a day — as commercial and strategic stocks in consuming countries flowed into the market. By August, cumulative draws since February had reached 507 million barrels. Strategic reserves, often criticised as an expensive insurance policy, were the first line of defence and did their job.
Second, redirection. Producers in the Gulf with pipeline access to terminals outside the Strait redirected part of their exports through them. This did not replace the lost volumes, but it demonstrated the value of infrastructure built precisely for this contingency.
Third, other producers. Output from outside the Middle East rose to record levels. The IEA revised its 2026 supply growth expectation for the Americas up by more than 600,000 barrels a day, to 1.5 million barrels a day, as operators there responded to price signals.
Fourth, demand destruction. Higher prices, product shortages and deliberate demand-saving measures reduced consumption. The IEA expects global demand to fall by 2.5 million barrels a day in 2026, with the losses concentrated in middle distillates and petrochemical feedstocks, especially in Asia. Demand fell by 5.3 million barrels a day year on year at its May low point.
The energy security lesson
None of the four buffers was sufficient on its own. Together, they kept the market functioning through a loss of more than ten per cent of world supply. Resilience is layered, and the layers have to exist before the event.
Why LNG has been hit harder
Crude can be partially rerouted. LNG cannot. A large share of the world's LNG export capacity sits inside the Gulf, and the tankers that carry it have no alternative route. Gas markets, particularly in Asia, have faced a more complete loss of supply than oil markets.
The IEA's World Energy Investment 2026 report notes that the crisis has made Asian importers cautious about gas dependence — even as investment in natural gas rises to a ten-year high of $330 billion, largely on the strength of LNG projects elsewhere.
The product market squeeze
The disruption has affected refined products as much as crude. Global refinery throughputs are projected to fall by around 2.5 million barrels a day in 2026, as feedstock supply and damaged infrastructure constrain runs. Tightness in light and medium distillates has pushed refining margins in the Atlantic Basin to record highs, and diesel prices in particular have weighed on consumption.
For energy professionals, the message is that supply security is not only about crude; it is about the capacity to turn crude into the products that economies actually use.
What this means for energy professionals
The 2026 disruption has changed the risk conversation in every energy company. Exposure to a single route, a single supplier or a single market is no longer a theoretical vulnerability. The professionals who will be valued are those who can quantify that exposure, design the buffers and alternatives that reduce it, and lead their organisations through the next event when it comes.
PetroKnowledge's Energy Risk Management, Corporate Risk & Crisis Management, and Price Risk Management in the Energy Industry training courses are built for exactly that capability. The market has just run the scenario for real. The task now is to learn from it.
Frequently Asked Questions
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How much oil normally passes through the Strait of Hormuz?
In a normal year, roughly a fifth of global oil consumption and a comparable share of LNG trade pass through the Strait, making it the single most important maritime chokepoint for energy. Its closure in 2026 removed, at the low point, more than ten million barrels a day of Gulf production from world markets, according to the IEA.
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How has the disruption affected global oil supply and demand in 2026?
The IEA now expects world oil supply to average 100.7 million barrels a day in 2026, down 5.7 million barrels a day on 2025, and demand to fall by 2.5 million barrels a day as higher prices and product shortages curb consumption. Observed inventories drew by more than 500 million barrels between February and August.
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Why has LNG been affected as much as oil?
A large share of the world's LNG export capacity is located inside the Gulf and depends on the same shipping route. Unlike crude, which can partly be redirected by pipeline to terminals outside the Strait, LNG has no such bypass, so the loss to gas markets has been more complete.
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What does energy security mean for a company rather than a country?
For an organisation, it means understanding which of its supplies, routes, customers and revenues depend on a single point of failure, holding buffers or alternatives where the exposure is unacceptable, and having a tested plan for the day the failure occurs. The 2026 disruption has made this a board-level question.
