The global oil market is headed for a prolonged crisis, according to energy analyst Paul Sankey, president of Sankey Research. Even if the Strait of Hormuz reopens immediately, disruptions to oil supplies will persist for months due to logistical challenges and depleted reserves.
Tanker Logistics Lock in Shortages
Sankey explained that tankers carrying pre-war shipments from the Persian Gulf have only now reached their destinations. With the strait effectively closed for over 40 days, the lack of new supplies has created a critical bottleneck. "In this case, we can be sure that the next two months is going to be an ongoing, absolute disaster even if you open the straits tomorrow," Sankey told Bloomberg TV. "It's just locked in by virtue of tankers, and the tankers are all in the wrong places."
Reserves Depleting Fast
Countries have been tapping into their strategic oil reserves to mitigate the shortage, but inventory levels are becoming alarming. Sankey warned that follow-on releases will become increasingly difficult as reserves dwindle. JPMorgan analysts predict that commercial inventories in OECD countries could hit "operational minimums" by late May, leading to exponential price increases.
"The moment of truth could come next month," JPMorgan analysts noted in a recent report. "Price increases become exponential rather than linear."
Long Road to Recovery
Even after the conflict ends, restarting the oil supply chain will take significant time. Ports may require up to two months to reopen, and tanker crews could wait weeks before feeling safe to transit the strait. JPMorgan estimates it will take four months to restore oil production to 99% capacity.
Frederic Lasserre, head of analysis at Gunvor Group, echoed these concerns, stating that prolonged conflict could push oil markets to "tank bottoms," leaving them critically short of stockpiles.
With 1 billion barrels of supply already wiped out—and potentially growing to 1.5 billion if the conflict continues—the disconnect between market perception and physical reality is stark. As Sankey cautioned, the coming months will test the resilience of global energy markets like never before.