Shipping through the Strait of Hormuz has all but stopped. One week after US and Israeli strikes on Iranian military and nuclear sites triggered retaliatory drone attacks across the Persian Gulf, fewer than two commercial vessels a day are crossing a waterway that normally handles 20 million barrels of oil.
Brent crude settled near $93 on Friday. WTI hit $90.90, up roughly 35% since the conflict began on February 28. Goldman Sachs warned that five weeks of flat Hormuz traffic would push Brent past $100. JPMorgan put the severe-case number at $120.
Traders who lived through the 2019 Abqaiq drone strike or the 1980s tanker wars have not seen anything like this. The question now is how long it lasts, and what tools the world has to blunt the damage.
147 ships and nowhere to go
Freight analytics firm Xeneta counted 147 container ships sheltering inside the Persian Gulf as of March 6. Maersk, the world's second-largest container line, suspended two key services through the strait. Lloyd's List reported that war-risk insurance premiums for Gulf-bound tankers have jumped tenfold, pricing most independent shipowners out of the route.
Iran has jammed GPS signals across the area, adding a layer of navigational risk that even military escorts cannot easily fix. The White House ordered Navy convoy protection earlier this week, but the fleet acknowledged it lacks the capacity to escort commercial traffic at scale.
The pipeline workaround and its limits
Saudi Aramco is dusting off its East-West Pipeline, known as Petroline, which runs from the Abqaiq processing hub to the Red Sea port of Yanbu. Its nameplate capacity sits at 5 million barrels per day, and Aramco has claimed it can push 7 million in an emergency, though that figure has never been tested under sustained load.
The UAE has a second bypass. The Abu Dhabi Crude Oil Pipeline carries roughly 1.1 million barrels per day to Fujairah on the Gulf of Oman, outside the strait. The pipeline's total capacity is 1.5 million barrels per day, leaving about 400,000 barrels of room to ramp up.
Add them up and the two pipelines could theoretically move about 6.5 million barrels per day at full stretch. That still leaves a gap of over 13 million barrels, more than the entire daily output of Saudi Arabia, with no route to market. Aramco told Reuters it is studying Red Sea export options, but rerouting that volume would take months, not days.
Strategic reserves: loaded gun, no trigger
The US Strategic Petroleum Reserve holds about 415 million barrels, roughly half its full capacity after heavy drawdowns during the Biden administration. The Trump White House said on March 2 it has no immediate plans to tap it. Trump spent years criticizing Biden for draining the reserve and promised voters he would refill it.
That political calculus could shift fast. At current consumption rates, 415 million barrels covers about 22 days of US imports. Enough to matter, but not enough to replace Gulf supply for long.
The International Energy Agency struck a similar wait-and-see tone. Executive Director Fatih Birol said "all options are on the table" but stopped short of calling for coordinated releases among member nations. Analysts at Bruegel, the Brussels-based think tank, estimated that a standoff lasting four to eight weeks would likely force the IEA's hand.
Three scenarios for what comes next
Ceasefire or de-escalation (Brent back to $75-$80). If diplomatic channels produce a halt to hostilities and Iran signals it will not target Gulf shipping, tanker traffic could resume within days. Insurance markets would take longer to normalize, but prices would retreat sharply.
Prolonged standoff, no escalation (Brent $95-$110). If the military campaign winds down but Iran continues to threaten commercial shipping through mines, drones, or GPS jamming, tanker owners will stay away. Pipeline workarounds would partially offset lost volumes, but not enough to prevent a grind higher.
Full escalation (Brent $120+). If Iran deploys anti-ship missiles or mines the strait, the disruption moves from voluntary avoidance to physical blockade. Goldman Sachs and JPMorgan both flagged this as a tail risk that could send Brent toward $150-$200. A coordinated SPR release and IEA emergency action would follow, but the shock to global supply chains, and inflation, would already be underway.
What to watch this week
Markets will fixate on three signals. First, any diplomatic movement. Secretary of State Marco Rubio said the US would unveil a phased plan to ease oil prices, though no details have emerged. Second, tanker tracking data from the strait. Even a handful of vessels resuming transit would signal the worst may be passing. Third, whether the IEA moves from rhetoric to action on reserve releases.
For now, the math is blunt. Twenty percent of the world's oil supply is stuck behind a chokepoint that nobody is willing to cross, and the workarounds can cover less than half the gap. Until that changes, $100 oil is not a forecast. It is a countdown.