Since the escalation in hostilities between the US-Israel against Iran on February 28, 2026, traffic across the 34 km-long world’s most critical energy chokepoint has virtually come to a halt—now considered the biggest disruption in the history of the global oil and gas markets.
| Photo Credit:
Reuters
Oilfield services major Baker Hughes and the Federal Bank of Dallas expect traffic in the Strait of Hormuz (SoH) to normalise by the second half of the current calendar year.
On the other hand, the International Energy Agency (IEA) expects flows through the SoH to gradually resume from May 2026 onwards
Since the escalation in hostilities between the US-Israel against Iran on February 28, 2026, traffic across the 34 km-long world’s most critical energy chokepoint has virtually come to a halt—now considered the biggest disruption in the history of the global oil and gas markets.
In Dallas Fed’s Q1 2026 Energy Survey, 39 per cent of the participating oil and gas companies said they expect normal traffic in the SoH by August 2026. Over that, another 26 per cent expect the same by November 2026, and 14 percent even later than that.
The data was collected between April 15–20 from 120 oil and gas firms. Of the respondents, 78 were exploration and production firms, and 42 were oilfield services firms.
Another important finding from the survey is that majority of the executives say that future disruptions to the SoH are likely. Of respondents, 48 per cent say it is “very likely” that geopolitical events will disrupt traffic again within the next five years, while 38 percent view it as “somewhat likely.”
Meanwhile, top drilling rig supplier Baker Hughes in its Q2 2026 and FY2026 guidance assumptions said “Middle East disruptions continue through the end of June, without further escalation. Conflict resolved at the end of Q2 (2026), with Strait of Hormuz fully operational during all H2 2026.”
The IEA has highlighted three case scenarios on the resumption of traffic through the SoH.
“While many questions remain over the pace of an eventual recovery of flows, this Report assumes, in our “base case”, that oil shipments will gradually resume from May (2026), allowing a recovery in oil production and refinery activity through Q3 2026,” it explained.
In this case, IEA balances show oil market deficits returning to a surplus that averages 2.5 mb/d in H2 2026. The cumulative supply deficit peaks in June before correcting almost linearly by year end with the recovery in supply, it added.
“In our ‘protracted case’, disruptions to Middle East energy production and trade remain high, and energy flows to international markets remain largely restricted. This will cause deficits in the oil balance to persist, with the resulting price rise and economic impact pushing oil demand into a large year-on-year contraction,” IEA said.
The price and economic effects of this scenario, plus already announced demand reduction measures, reduce demand by 5 mb/d y-o-y on average from Q2 2026 through Q4 2026, it added.
The remaining shortfall in supply lifts the global call on stocks to an untenable 6 mb/d, or almost 2 billion barrels in aggregate losses by year end.
“With the geopolitical situation still in flux and the prospects for a lasting negotiated settlement to the conflict still unclear, our two cases span the range of probable outcomes. A middle case where flows see a gradual but only partial resumption before end-2026 may also be considered,” the IEA anticipated.
The IEA in its April oil market report said global oil supply plummeted 10.1 million barrels per day (mb/d) to 97 mb/d in March. Continued attacks on energy infrastructure in Middle East and ongoing restrictions to tanker movements through the SoH is leading to the largest disruption in history.
Published on April 26, 2026
