A lot of people out there seem to think that the crisis in the Strait of Hormuz is not that big of a deal, and that is because we aren’t feeling the consequences yet. By the end of this month, the last oil tankers that left the Persian Gulf before the war with Iran began will have arrived at their destinations. And right now nations all over the globe are running through their strategic energy reserves. Some nations have months of oil left, and some nations only have weeks of oil left. As those reserves start to run dry, we are going to witness a supply crunch that is absolutely unprecedented.
If you don’t believe me, perhaps you will believe the head of the International Energy Agency.
He is warning that we are “facing the biggest energy security threat in history”…
“We are facing the biggest energy security threat in history,” Fatih Birol, the head of the International Energy Agency, or IEA, told CNBC on Thursday.
“As of today, we’ve lost 13 million barrels per day of oil … and there are major disruptions in vital commodities,” he told Steve Sedgwick virtually at CNBC’s CONVERGE LIVE in Singapore.
Birol has previously warned that the Iran war and ongoing closure of the Strait of Hormuz would result in “the largest energy crisis we have ever faced” and urged governments to bolster their resilience with alternative energy sources.
For now, we are only witnessing limited rationing and limited shortages around the world because everyone is running through their strategic reserves.
And so it feels like we are going to come through this okay.
But the truth is that we aren’t.
Global supplies of oil and natural gas will get steadily tighter during the months ahead.
The Iranians are hardly letting any commercial vessels get through the Strait of Hormuz, and even if they suddenly changed their minds tomorrow we are being told that it could take up to six months to clear all of the mines out of the Strait of Hormuz…
It may take up to six months to completely clear the Strait of Hormuz of Iranian mines, according to a new report.
A Defense Department official relayed the estimate to lawmakers during a closed-door congressional briefing on Tuesday, three sources familiar with the matter told The Washington Post.
The assessment points to potentially long-lasting economic consequences, as the strait — now subject to dueling U.S. and Iranian blockades — is a critical trade artery that carried 20 percent of the world’s oil before the war.
It appears that Iran has been using this temporary ceasefire to lay more mines in the Strait.
And clearing them will not even begin until the end of the war…
Any efforts to remove the mines won’t even begin until the war ends, the official warned.
The Iranian navy began placing mines in the Strait of Hormuz in March, as US-Israeli forces continued their joint attacks on the country.
Meanwhile, Donald Trump is promising that the U.S. blockade of Iranian ports will continue until Iran finally agrees to make a deal…
I am convinced that Trump is quite serious about this.
According to CENTCOM, more than 30 vessels have been redirected by the U.S. Navy since the blockade was initiated…
The last update by CENTCOM, on Wednesday night, said 31 ships had been redirected since the start of the blockade.
Iran has called the blockade a violation of the ceasefire agreement, while the U.S. says it will remain in place as a condition of negotiations.
With Iran and the U.S. both blocking traffic, barely anything is getting out of the Persian Gulf.
It is a ticking time bomb for the entire global economy, and we are potentially facing catastrophic supply disruptions…
The scale of these observed and potential supply disruptions is without precedent. The 1973 oil embargo wiped roughly 7 percent of global oil production off the market but was politically reversible. The present crisis has reduced 13 percent of global supply, at least temporarily, and it is a physical disruption. The recovery of damaged infrastructure will take months or even years. Finally, the Middle East accounts for about 30 percent of total global oil supply; in a worst-case scenario, virtually all these volumes could be at risk.
The nations that will be the least affected are those that either do not need to import oil or that have accumulated large reserves.
For example, China possesses the largest strategic oil reserves in the entire world…
New data from the US government released this week shows just how aggressively China added to its oil reserves ahead of the war in Iran.
The US Energy Information Administration estimates China ended 2025 with nearly 1.4 billion barrels of oil stocked away, compared to 1.2 billion barrels among the 32 members of the International Energy Agency (IEA), which includes 413 million barrels in US coffers.
And the US has been drawing down its stockpile, with the latest US reserve levels showing about 405 million barrels following the sale of over 8 million barrels in the first half of April.
Even though the Chinese buy more oil and natural gas from the Middle East than anyone else, they will be able to function normally for many months.
Other countries will not have that luxury.
Before the war, it was being projected that the strategic reserves that the UK is holding can only last for about 90 days…
As of February 26, according to the UK Department of Energy Security and Net Zero, the UK holds about 38 million barrels of crude oil and 30 million barrels of refined products, as strategic reserves. The reserves are thought to be able to last around 90 days.
Other European countries are in even tougher positions.
Shortages of jet fuel will probably start to show up first.
At this point, we are being told that Europe only has about six weeks of jet fuel left…
Jet fuel prices have risen even faster, doubling in price to almost $200 a barrel. And as the war drags on, jet fuel is getting harder to come by for countries that don’t produce it or have limited supplies.
“In Europe, we have maybe six weeks or so (of) jet fuel left,” the International Energy Agency’s executive director, Fatih Birol, told the Associated Press on April 16.
It appears to be inevitable that flights will be canceled and planes will be grounded on a widespread basis.
In fact, Lufthansa has already announced that it will be eliminating about 20,000 short-haul flights…
Lufthansa is cutting roughly 20,000 short-haul flights this summer, citing a spike in jet fuel prices that has rendered many routes “unprofitable” as the global aviation industry grapples with rising costs.
The German carrier said Tuesday the cuts, which will run through October, are expected to save about 40,000 metric tons of jet fuel. The airline noted that fuel prices have roughly doubled since the outbreak of the Iran war.
“In total, 20,000 short-haul flights will be removed from the schedule through October, equivalent to approximately 40,000 metric tons of jet fuel, the price of which has doubled since the outbreak of the Iran conflict,” the company said in a statement. “The schedule adjustments reduce the number of unprofitable short-haul flights across the Lufthansa Group network.”
If the Strait of Hormuz is not opened soon, this will only be just the very beginning.
David Roche can see what is happening, and he is suggesting that a worst case scenario is ahead of us…
Irishman David Roche see’s what’s coming:
“We are going to run out of fuel in the global economy”
“The markets are in cloud cuckoo land”
“We are moving beyond initial inflationary affects to the second stage where there is no gas to price”
“Within a few months we will be in an economy which has to adjust downwards to eliminate demand for fuel that’s not there”
Sadly, if we can’t get the Strait of Hormuz opened we really will experience a global nightmare.
It is so frustrating to me that so many people out there do not seem to understand this.
Just because we aren’t experiencing the full consequences of this crisis today does not mean that those consequences are not coming.
It is going to take time for the strategic oil reserves to run dry.
But once they do, things are going to get really crazy.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
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