Beyond the lost city

• Four days’ worth. The IEA’s 400 million barrels might sound enormous—but it’s not, really. The U.S. contribution—172 million barrels over 120 days—amounts to about 1.4 million barrels a day, or roughly 15 percent of the supply lost to the Hormuz closure. Analysts at the investment bank Macquarie put it plainly: The entire release covers about four days of global production. Brent briefly dipped below $87 on the announcement, then climbed right back—past $100.
• The Strait stays shut. Iran closed Hormuz to Western-allied shipping on March 2 and has since introduced a selective transit system—allowing Chinese, Indian, Pakistani, and Turkish-flagged vessels through on a case-by-case basis, while blocking everyone else. Shadow-fleet tankers—ships masking their ownership and flag to evade sanctions—account for half of all March transits. The International Maritime Organization says roughly 2,000 vessels and 20,000 seafarers are stuck in the Gulf.
• The rerouting tax. Shipping that would normally pass through Hormuz is now going around the Cape of Good Hope, adding 10 to 14 days to Asia-Europe and Gulf-Europe routes. Container rates from Shanghai to the Gulf have more than doubled. Hapag-Lloyd, one of the world’s biggest shipping lines, has imposed a war-risk surcharge of $1,500 a container. On March 3, the cost of chartering a supertanker from the Middle East to China hit an all-time high: $423,736 a day.
• Europe’s storage problem. European natural-gas prices have roughly doubled since February 27. EU gas storage sits at about 30 percent—compared with 60 percent at this time last year. The Netherlands is below 10 percent. After Iranian missiles damaged Ras Laffan—the world’s largest liquefied-natural-gas export facility, in Qatar—QatarEnergy declared force majeure, a legal mechanism allowing it to suspend contractual deliveries, on all exports. Repair could take up to five years. Diesel has topped €2 a liter in Germany, Finland, France, Italy, and the Netherlands. Hungary and Croatia have imposed price caps.
• The consumer squeeze. The U.S. Federal Reserve held rates steady this week and raised its 2026 inflation projection. Fed Chair Jerome Powell acknowledged that higher energy prices will push up inflation but said it’s “too soon to know the scope and duration.” Wall Street has nearly eliminated its bets on rate cuts this year. The University of Michigan’s consumer-sentiment index fell as respondents surveyed after the war began erased gains recorded before it. In Europe, the European Central Bank held rates, cut its growth forecast, and warned that prolonged disruption would push inflation higher and growth lower.
• The next front. The war’s costs extend well beyond fuel. Roughly half the world’s urea and sulfur exports—key inputs for fertilizers—go through the Strait of Hormuz. Gulf states, which import more than 80 percent of their food by sea through the strait, face what analysts describe as a grocery-supply emergency. The Philippine peso has hit a record low. European Union chemical and steel manufacturers have imposed surcharges of up to 30 percent. Air-cargo rates from China to the United States are up 15 percent. Taiwan’s vulnerability to energy disruption has become an active geopolitical lever: Beijing has offered “energy stability” in exchange for reunification talks.
• And the bill keeps growing. Goldman Sachs estimates that if the Hormuz closure persists for two months, European gas prices could exceed €100 per megawatt-hour—a level not seen since the worst of the Russia-Ukraine energy shock in 2022. The energy-research firm Rystad forecasts that a four-month war will push Brent to $135 by June. The S&P 500 has posted four straight weekly losses—its longest losing streak in a year—and erased six months of gains. The U.S. ten-year Treasury yield has jumped 41 basis points since the war began.

Every major institution has tried to contain this. The IEA released its largest-ever stockpile. OPEC+, the cartel of oil-producing states, agreed to raise output. The U.S. Treasury authorized purchases of Russian crude already at sea. The administration has lifted sanctions on Iranian oil loaded on ships—to be clear: on oil belonging to the country it’s bombing.

Prices are still climbing. And the reserves are finite: The U.S. Strategic Petroleum Reserve, already depleted from the 2022 Ukraine-war release, will burn through 41 percent of its remaining stock if the current drawdown runs its full course. Collectively, the IEA’s member states will have committed a third of their emergency reserves. These are buffers designed to be used once and then replenished. Well, they’re being used now—and the Strait is still closed.

The 1973 oil embargo lasted five months. This war is just into its fourth week—but the IEA’s executive director has already called its oil-market challenges “unprecedented.” The emergency reserves are still flowing—but the Macquarie analysts’ math is still daunting: four days of global production versus indefinite disruption. Europe needs to refill its gas storage before winter—and storage is at half last year’s level, while prices are twice as high. QatarEnergy’s CEO says the damage to Ras Laffan will take three to five years to repair—even after the fighting stops. And the selective transit system Iran has improvised in the Strait, letting some ships through while blocking others—that’s as unprecedented as it gets.