Fading Hopes for Reopening Strait of Hormuz Threaten Global Oil Supply

Hopes for an early return to free passage through the Strait of Hormuz are fading as the closure of the waterway approaches three months, according to industry reporting. Iran has established a new entity called the 'Persian Gulf Strait Authority' to assert control, prolonging disruptions to a region that handles a large share of the world’s oil flows.

The ongoing disruption is removing an estimated 14 million barrels per day of oil supply from global markets, contributing to falling inventories and prompting warnings from the chemicals industry about prolonged shortages. Analysts and industry participants say the continued restriction of flows raises the risk of a severe global economic shock comparable in consequence to the 2008 downturn if disruptions persist.