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Brent holds near $85 as Hormuz closure strips 100 million barrels a week from supply
Front-month crude sits far below its May peak despite mounting physical losses, and traders are betting the shortfall has yet to bite.
ICE Brent crude front-month traded at $85.09 on Friday (2026-07-17), well below the $111 it topped in mid-May (2026-05-12) when analysts began pricing in a longer closure of the Strait of Hormuz.5
The strait carried 21 million barrels a day in 2022, about a fifth of world petroleum consumption, and it has stayed effectively shut since the conflict that closed it in late February.2,1 A benchmark this steady, set against a supply gap that wide, is what the market is now weighing.
Every week the strait remains closed removes nearly 100 million barrels from global supply, according to industry estimates.1 The Economist reported in mid-May (2026-05-17) that nearly 14 million barrels a day, 14% of global output, were being lost, with at least 2 billion barrels likely to disappear before the crisis ends.6
So far, price has refused to follow the physics. Traders appear to believe the disruption has not meaningfully cut usable supply, and no interruption to physical exports through Hormuz has been confirmed.3 Three crude tankers carrying a combined 6 million barrels left the strait on Monday (2026-05-18) with their tracking systems switched off, Kpler and LSEG data showed, evidence that cargoes are still moving.3
The larger reason the flat price has held sits on the supply side. Morgan Stanley estimated in May that a 3.8 million barrel-a-day rise in US exports, combined with a 5.5 million barrel-a-day cut in Chinese imports, shielded the rest of the world from 9.3 million barrels a day of tightness.4
That balance will not last. Chinese buying should recover once refiners draw down inventories, and US output cannot keep expanding at the same pace. The bank titled its note a "race against time."4
Producers are trying to route around the chokepoint. Saudi Aramco plans to move more than 5 million barrels a day through alternative outlets, roughly what that infrastructure can already handle, having briefly lifted its East-West pipeline to 7 million barrels a day in 2019 by converting some gas-liquids lines.1,2 Even at full stretch, those outlets replace only part of the pre-war throughput.
The tell will not be the flat price but the Brent-Dubai spread and freight rates east of Suez. If the westbound routes fill and Asian crude inventories start drawing hard, the calm in futures will break, and Morgan Stanley's timing bet on US and Chinese buffers is what stands between the current market and that break.4