Hormuz Closure Cuts 10% of Oil Supplies, Spurs 20,000 Flight Cancellations
Strait of Hormuz closure in its ninth week has slashed at least 10% of global oil supply, prompting airlines such as Lufthansa to cut 20,000 flights and diesel prices in Europe to exceed $200 a barrel. Traders warn a 12-week disruption could push dated Brent above $154 a barrel, risking recession.
1. Supply Disruption
The closure of the Strait of Hormuz has entered its ninth week, removing at least 10% of global crude output as emergency inventories shrink. Traders estimate current supply losses around 4 million barrels per day, potentially doubling to 5 million next month.
2. Demand Shocks Across Sectors
Airlines including Lufthansa and KLM have axed thousands of short-haul flights, while petrochemical plants in Asia report declining feedstock usage. Diesel futures in Europe topped $200 a barrel, and Indian trucking firms brace for price spikes and rationing.
3. Economic and Pricing Outlook
Consultants project dated Brent could exceed $154 a barrel with a 12-week disruption, and in extreme scenarios climb toward $250. Forecasts warn prolonged shutdown could halve regional growth and tip the global economy into recession.