Oil Prices Surge Near Five-Month High Amid Strait of Hormuz Tensions

Oil prices are climbing toward their highest points in five months as attacks on tankers intensify around the Strait of Hormuz and diplomatic efforts to end the US-Iran war stall completely. Brent crude, the global benchmark for pricing oil, jumped more than $2 to reach $110.85 a barrel on Wednesday. That figure sits close to a peak not seen since last autumn.

The surge follows reports that Iran's Islamic Revolutionary Guard Corps (IRGC) claimed two tankers were set ablaze after hitting mines at what it described as an illegal crossing point in the strait. Then, on Thursday, the IRGC said it struck seven more vessels. Washington dismissed those claims outright. In a statement, Iranian forces maintained that four of the ships caught fire overnight while transferring oil.

Elsewhere, the Houthis, an armed group also known as Ansar Allah or Supporters of God in Arabic, seized territory in Yemen near the Bab al-Mandeb strait last September. That waterway serves as a critical chokepoint for traffic moving into and out of the Red Sea and acts as the gateway to Egypt's Suez Canal.

Now analysts worry about what happens next if fighting resumes fully. The scenario involves the Strait of Hormuz shutting down completely while Houthi attacks strangle off Bab al-Mandeb. How long could global reserves last under such pressure? The answer may be grim with emergency stocks sitting at multidecade lows. These stockpiles have been tapped heavily since the war on Iran began on February 28.

Strategic oil reserves are simply stockpiles of crude and fuel held by governments or companies for use during a supply crisis. The International Energy Agency, established in 1974 after the Arab oil embargo, coordinates most of them. Its importing members must hold at least 90 days of net imports. But even that buffer looks thin when two major shipping lanes face simultaneous threats.

What happens if those lines go dark? A single month or two might be all the world has left if Hormuz closes again and Bab al-Mandeb gets choked off by Houthi fire. That is a sobering thought for communities dependent on energy security.

China and India sit outside this emergency framework entirely. A record amount of reserves has already been released this year since the conflict began. On March 11, days after fighting started between US forces and Israel against Iran targets in the region, the International Energy Agency's thirty-two members voted to make four hundred million barrels available from their emergency supplies. This number is more than double the volume freed up following Russia's full-scale invasion of Ukraine back in 2022. The United States pledged one hundred seventy-two point two million barrels from its Strategic Petroleum Reserve, while Japan committed seventy-nine point eight million according to official IEA figures. Those numbers have already changed the landscape for global supply. The SPR has since fallen to two hundred eighty-three million barrels, marking its lowest level since October 1982 based on data from the US Department of Energy. Much of that oil was lent rather than sold and must be returned with extra barrels added back later, according to the US Energy Information Administration.

How much oil is left in these tanks? Far less than before the war began in February, and not all of it can be used right now. Aaron Kildow, a senior crude oil analyst at Sparta Commodities, told Al Jazeera that global strategic stocks excluding China and Iran have fallen by nearly three hundred twenty-seven million barrels since the end of December 2025. The US, Europe, and Japan accounted for about ninety-five percent of that draw. He estimated there are only about four hundred million barrels of usable reserves worldwide left, excluding China's massive stockpile which is unlikely to be exported and Gulf stocks that could be cut off by a total closure of Hormuz. Nearly half of these available stocks sit in Japan. Europe has about seventy-six million barrels uncommitted, but members such as Germany are holding some back for a local emergency, Kildow noted. "Europe is the real wildcard, both on timing and willingness," Kildow said with concern. Meanwhile, China's onshore crude stocks stand at one point one three billion barrels, down from one point two three billion in late February but still enough for about eighty days of refinery intake according to Muyu Xu, a senior crude oil analyst at the analytics firm Kpler, who spoke to Al Jazeera. India's reserves cover just eight days of its imports, Reuters news agency reported.

What would a full closure of Hormuz and Bab al-Mandeb mean for everyone? Before the war started, about one-fifth of the world's oil and liquefied natural gas supplies passed through the Strait of Hormuz, roughly twenty million barrels of oil a day. Saudi Arabia increased the amount of crude it transports from its oilfields in the east to its Red Sea port of Yanbu in the west via the East-West Pipeline, thereby bypassing Hormuz entirely. But there have been strikes on that pipeline already, and tankers heading south from Yanbu must pass through Bab al-Mandeb where the Iran-backed Houthis declared a blockade on Saudi shipping in July. Only a confirmed three hundred seventy-three thousand barrels a day of Saudi crude have transited Bab al-Mandeb so far this month, the lowest level since February according to Xu, with most Yanbu cargoes now heading north via Egypt instead. If Hormuz were shut and the Houthis blocked all Saudi tankers, Gulf producers could export only through a few pipelines and Yanbu's northbound route, Xu explained. That would leave about seven point five million barrels a day of Middle Eastern crude against sixteen point eight million now, a shortfall of about nine point three million barrels a day she estimated. "If such attacks occur, the supply disruption could be even more severe and prolonged," Xu said referring to strikes on oilfields, terminals and pipelines.

So how long would reserves last in this scenario? Not for long – possibly just weeks according to experts. If Kpler's estimated shortfall had to be covered entirely from the roughly four hundred million usable barrels that Kildow identified, they could not release them that fast in practice. Japanese and South Korean reserves can move quickly said Kildow, but US barrels are staged over three months and Europe's contribution remains uncertain. Chris Beauchamp, chief market analyst at IG Group, noted the world was fortunate after the first closure. "The salient feature of March and beyond was how a crisis didn't actually develop," he stated. The risk to communities grows if these pipelines or shipping lanes fail next. A sudden spike in prices would hurt low-income households most while factories shut down their lines.

We got away with it," one voice declared. The sentiment hangs heavy in the air. Beauchamp offered a stark warning about what comes next if a protracted conflict drags on. "I don't think the global economy will be as lucky next time if there is a protracted conflict," he said. He gave a tight deadline for action. "A month or two is all we have."

The world would not literally run out of oil. That phrasing misses the point entirely. Instead, prices would rise until enough demand disappeared. Beauchamp called this outcome very distinct. "One hundred fifty dollars [per barrel] becomes a very distinct possibility," he noted. Once that number appears, significant demand destruction follows naturally.

Who bears the brunt first? The sharpest squeeze lands on diesel. This fuel is already nearly double the price of crude, according to the IEA. Refiners would compete fiercely for crude grades rich in diesel. Kildow explained where this cost goes. "Refiners would compete for crude grades rich in diesel, a cost that ultimately lands on consumers," he said.

Asian importers with thin reserves stand at the front line of this storm. Most Gulf exports in September and October went to Asian buyers. India and Pakistan are among the most exposed nations, Kildow stated. Look at their alternatives. Their nearest supply from West Africa sits 25 to 28 days away by sea. Compare that to two days from Fujairah in the United Arab Emirates. The difference is deadly. "The squeeze won't hit uniformly," Kildow said. "It lands fastest and hardest where reserves are thinnest and substitute supply is farthest away."

Who would gain? Oil producers far from the Gulf region see a different picture entirely. In the second quarter of this year, as the US-Iran war was under way, ExxonMobil reported earnings of $14.5bn. That figure marks its highest in four years. Chevron posted $12bn, its best in six years. Shell more than doubled its earnings to nearly $10bn. Their profits are largely down to the high oil prices.

A second shock would send refiners scrambling for supplies from the US, Latin America, West Africa and Russia, Xu said. This shift allows non-Middle Eastern producers to benefit from higher crude prices. "This would allow non-Middle Eastern producers to benefit from higher crude prices, potentially alongside lower transportation costs," she said. They could also cut transport expenses while others drown in freight fees.

In August, US President Donald Trump took a hard line against these winners. He accused companies such as ExxonMobil and Chevron of being "making too much money based on a shortage". The anger is palpable. Communities risk losing access to affordable fuel while distant corporations reap rewards. The imbalance threatens stability. Can the world adjust fast enough before prices crush demand?