Global Macro Research
GrowthHormuz closure: When will physical shortages kick in?
The global economy is heavily reliant on the Strait of Hormuz for the supply of many essential commodities. Since its closure, prices have done most of the work rationing reduced supply. But outright physical shortages are appearing, and there is potential for more severe scarcity in crude oil and refined products in June if the strait remains closed.
Author
Cameron Love
Economic Analyst
Duration: 1 Min
Date: 29 mei 2026
Key Takeaways
- Supply shortages due to the Iran war are beginning to appear and look likely to worsen in the coming months. The drawdown in oil inventories could reach operational stress levels as soon as June.
- Strategic petroleum reserve releases, easing sanctions on Russian and Iranian supply, and reductions in Chinese imports have offset the impact so far, but this has its limits.
- Physical oil shortages may see prices rise non-linearly to curb demand. Even post-conflict, the need to replenish inventories will keep oil prices elevated into next year.
- Meanwhile, the implications from the fertiliser disruption are much more severe than those experienced as a result of the Ukraine war, with yields to be impacted into next year. A sharp rise in food inflation is likely.
- The supply shock will accelerate the trend towards self-sufficiency and resilience. This could benefit less geopolitically exposed fossil fuel producers as well as green energy producers.
- And more broadly, a world of more frequent supply shocks means persistent pressure on inflation and bond term premia.
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