On June 26, crude oil prices surged, with June WTI crude (CLM26) closing up 2.09% at $97.06 per barrel and June RBOB gasoline (RBM26) rising 1.12% to $3.30 per gallon, fueled by stalled peace negotiations between the US and Iran and ongoing blockades in the Strait of Hormuz. This disruption threatens approximately 20% of the world’s oil supply, as Goldman Sachs estimates crude output in the Persian Gulf has decreased by over 14.5 million barrels per day (bpd), lowering global crude stockpiles by nearly 500 million barrels.
The US began blocking vessels passing through the Strait of Hormuz on April 13, 2023, significantly impacting oil production from regional producers, which have had to cut back by 6%. The International Energy Agency reported that approximately 13 million bpd of the global oil supply is affected by the war in Iran and that over 80 energy facilities have been damaged, potentially delaying recovery by two years.
In response to the ongoing crisis, the number of active US oil rigs decreased to 407, near a 4.25-year low, reflecting broader production challenges amid geopolitical tensions. The situation remains volatile as discussions about a ceasefire, involving proposals from Iran to reopen the Strait, continue.
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