The Strait of Hormuz currently handles about 20% of global oil shipments but is flowing at roughly 15% of normal levels, causing crude inventories to accumulate at production sites. With only 300 million barrels of spare landed storage—equivalent to 18–23 days of flows under full closure—producers face forced output cuts, as seen in Iraq’s 1.5 million barrels per day reduction.

Goldman revised its Brent outlook to an average of $76 per barrel in Q2 2026, up from $66, and raised its WTI forecast to $71 from $62. Analysts warn that if Hormuz disruptions persist for another five weeks, Brent could surge to $100 per barrel before demand destruction pressures emerge.

The supply shock has propelled the Energy Select Sector ETF to a 26% year-to-date gain, outperforming major indices. Continued price volatility and a potential $100 crude scenario could drive further sector rotation into energy stocks, though steep price levels may eventually dampen demand growth.