LNG Stuck at 8% of Pre-Crisis Flows as Strategic Reserves Near Limits
The IEA's record 400-million-barrel emergency release covers roughly 20 days of Hormuz supply losses, while crude and gas markets diverge sharply on recovery prospects.
Since the Strait of Hormuz disruption began in March 2026, crude and LNG have parted ways. Naval escorts operating under Project Freedom had shepherded more than 2,000 commercial vessels through the strait, according to analysis published Sunday (2026-09-20), enabling a partial crude recovery. LNG flows remain stranded at roughly 8% of pre-crisis volumes, the same analysis noted, because specialised carriers and liquefaction terminals require more than military protection to resume normal operations.5
The emergency response rested on an assumption that inventory cover would be sufficient. The IEA coordinated a record 400-million-barrel release from strategic stocks in March 2026, the largest in the agency's history, with the United States alone committing 172 million barrels from the Strategic Petroleum Reserve. Analysts estimate those combined volumes cover only around 20 days of the supply lost to the Hormuz disruption.5,2
EIA weekly data show the pace of US drawdown. The SPR fell from 413.3 million barrels on April 3 (2026-04-03) to 286.6 million barrels by August 28 (2026-08-28), a decline of nearly 127 million barrels in under five months, close to the full US commitment.4
Before the crisis, roughly 20 million barrels per day of crude and petroleum products moved through the strait alongside 10.5 billion cubic feet per day of LNG, together accounting for around 20% of global petroleum consumption. Analysts estimate the current disruption has removed between 11 million and 14 million barrels per day from world supply, more than double the 4-5 million barrels per day removed by the 1973 Arab Oil Embargo.5
Crude markets reflect the partial recovery that LNG markets have not yet shared. ICE Brent crude front-month traded at $100.20 a barrel on Wednesday (2026-09-23), while Dubai crude stood at $113.98 a barrel, a spread that signals persistent tightness in Gulf grades even as crude tanker transits have resumed at scale.3
The IEA cut its global oil demand forecast by 2.45 million barrels per day year on year for the second quarter of 2026, with full-year demand now expected to fall 420,000 barrels per day, about 1.3 million barrels per day below pre-conflict projections. LPG, ethane and naphtha account for roughly half of that downgrade, an average reduction of about 700,000 barrels per day, with the sharpest losses in the second quarter. Jet fuel and kerosene demand fell 210,000 barrels per day below pre-conflict forecasts.1
Policy responses on the crude side have had measurable effect. Changes to US licensing rules enabled Chevron and Repsol to expand Venezuelan operations, and oilfield services firms including SLB, Halliburton and Baker Hughes increased activity there. Those barrels have provided a swing option for refiners but have not matched the quality or scale of Gulf grades displaced by the crisis.1
LNG has no equivalent. JKM Asian spot prices stood at $26.05 per MMBtu on Wednesday (2026-09-23), reflecting a market that sees no near-term return of Hormuz LNG flows. European buyers drawing on ICE Endex TTF front-month at €73.37 per megawatt-hour on Wednesday (2026-09-23) face competing demand from Asian importers absorbing the same Atlantic Basin cargoes that would otherwise head to Europe ahead of winter demand.5
Oxford Economics reportedly cut its 2026 global GDP growth forecast to 2.4% from 3.0% following the escalation. Demand destruction has done part of the rebalancing that reserves and alternative supply have not fully managed. But the SPR is finite. With 127 million barrels drawn in under five months and LNG flows still at 8% of pre-crisis levels, the 20-day buffer calculation built into the March 2026 emergency release looks like the floor on the problem, not the ceiling.4,1,5