The US war against Iran has caused the largest oil supply disruption in history, more than doubling the previous record set during the Middle East crisis of the 1950s, according to an analysis by consulting firm Rapidan Energy.
Approximately 20% of the world’s oil supply has been disrupted for nine days as oil tanker traffic through the Strait of Hormuz remains paralyzed. In response, crude oil prices have risen above $100 per barrel.
The biggest disruption before the current war came during the 1956 Suez Crisis, when Britain, France and Israel invaded Egypt’s Sinai Peninsula, the energy consultancy told clients in a Sunday note. In that crisis, around 10% of the world’s oil supply at the time was disrupted.
Comparison of oil supply disruptions
| Crisis | Supply interrupted | Available surplus capacity (% of world) | Capacity Location |
|---|---|---|---|
| Suez Crisis (1956-57) | 10% | 35% | United States, some in the Gulf |
| Arab oil embargo (1973) | 7% | 8% | Saudi Arabia/Gulf |
| Iranian Revolution (1978-79) | 5% | 5% | saudi |
| Gulf War (1990-91) | 9% | 4% | saudi |
| Iran War (2026) | 20% | 0% | N/A – Discontinued |
Fountain: Rapidan Energy
The disruption caused by the Strait closure is almost three times greater than the shock caused by the 1973 Arab oil embargo, Rapidan analysts told their clients. The Arab embargo disrupted about 7% of global supplies.
The big difference between the supply shock of the Iran war and past crises is that the world has no additional oil capacity to address the problem, analysts said. Saudi Arabia and the United Arab Emirates hold the overwhelming majority of the transition capacity, but have been cut off from the global oil market by the closure of Hormuz, analysts said.
“The conflict has not only taken a historically high share of global supply out of commission, but at the same time has disrupted major holders of spare capacity,” Rapidan analysts said. “The result is a market without a significant cushion. There is no undecided producer positioned to intervene.”
This means the global oil market will need to balance itself by destroying demand through a sharp rise in oil prices, analysts said. The US strategic oil reserve is “finite and insufficient to fully offset” supply bottled up in the Persian Gulf due to the closure of Hormuz, they said.
The Strategic Petroleum Reserve currently holds 415 million barrels, about 58% of its total permitted capacity of 714 million barrels, according to the Department of Energy.
A White House official told CNBC on Friday that the Trump administration believes “oil markets remain well supplied and if we need to take additional steps, we will.”
International Energy Agency member states will be pressured to release their strategic reserves because this is “the only option left to respond to supply,” Rapidan analysts said.
Group of Seven finance ministers were expected to meet at 8:30 a.m. ET to discuss a possible joint release of oil reserves coordinated by the IEA, people familiar with the matter told The Financial Times.
