CorrectionThe 17 July Daily Briefing described a ~20% fall in European gas that did not happen — August TTF settled at €54.79/MWh on 16 July, essentially flat. During our platform rebuild, a retired machine running an outdated data feed briefly came back online and republished week-old settlements as live prices. The briefing has been withdrawn, and live prices are now verified against exchange settlement history before publication.
JP Morgan Sees Monthly Oil Demand Losses Accelerating as Hormuz Blockade Drags Into Third Month
Cumulative Middle East supply losses near 1 billion barrels as strategic reserves race to fill a gap the IEA calls unprecedented.
President Donald Trump's rejection on Monday (2026-05-18) of Iran's response to a US peace proposal pushed oil prices higher and extended a rally that has left forecasters scrambling to revise their supply models. The diplomatic stalemate, now entering its third month, has kept the Strait of Hormuz effectively closed and is accelerating the pace at which JP Morgan and other analysts see monthly oil demand losses compounding.6
ICE Brent crude front-month closed at $109.26 a barrel on Friday (2026-05-15), gaining more than 3% after China gave no indication it would press ally Iran to restore normal tanker traffic through the strait. Trump's trip to China had briefly raised hopes of a ceasefire breakthrough. Those hopes were extinguished before the week was out.3
Kpler data show the cumulative loss of Middle East oil supply since February 28 had reached 782 million barrels as of May 8 (2026-05-08), and was on track to breach 1 billion barrels by the end of May. The country-level breakdown is stark: Saudi Arabia is losing over 3 million barrels daily, Iraq is down 2.88 million barrels per day, Kuwait has fallen by 1.75 million barrels per day, and Iran's output is 1.69 million barrels per day lower.1
The International Energy Agency estimated total current supply loss at 10.5 million barrels per day — nearly three times the 3.9 million barrel daily decline the agency had pencilled into its full-year 2026 supply forecast.1 Global demand, by the IEA's own projections, would fall by only 420,000 barrels per day over the same period, leaving a gap that strategic releases cannot close indefinitely.1
Governments and industry had released 164 million barrels from reserves as of May 8 (2026-05-08), a pace the IEA described as unprecedented. The agency's planned total strategic release stands at 400 million barrels, a figure already dwarfed by losses that Kpler puts close to 1 billion barrels.3
Morgan Stanley has gone further in its damage assessment, forecasting that the market will lose another billion barrels across 2026 once the time required to restart oilfields, repair refineries and reposition the tanker fleet is accounted for. That timeline extends well past any near-term diplomatic resolution.4
The US has moved to fill part of the gap. American exports of crude oil and petroleum products hit a record 14.2 million barrels per day in the week of May 11 (2026-05-11), according to Energy Information Administration data — 33% higher than the equivalent week in 2025. The fleet of empty tankers that Trump flagged three weeks prior began carrying barrels back into global markets that week.2
Analysts had expected the Strait of Hormuz to reopen by the end of May or early June after the US and Israel launched their campaign against Iran roughly two and a half months ago. That timetable has slipped. JP Morgan and the IEA have both described a non-linear price spike scenario as increasingly plausible.3,5
ICE Brent crude front-month was trading at $85.97 a barrel as of Friday (2026-07-17), well below the May peak, while the VIX rose 8.14% to 18.07. The gap between retreating outright prices and rising volatility gauges reflects a market that has partially priced in diplomatic progress while hedging against a renewed supply shock if talks collapse again.
The IEA's 3.9 million barrel daily supply loss forecast was already an optimistic baseline when it was published. If actual losses hold near the 10.5 million barrel level identified in its May report, remaining strategic stockpiles will drain at a pace that leaves the market exposed well before any physical restart of Persian Gulf oilfields could take effect — and Morgan Stanley's second-billion-barrel estimate suggests the restart itself will take longer than markets have so far assumed.1,4