Europe must prepare for a possible oil supply crunch

A potential oil supply crunch looms as Europe confronts ongoing disruption to global energy flows. The Strait of Hormuz was effectively closed on February 28 after the United States-Israel attack on Iran, creating the largest energy shock in history and hitting LNG and crude markets. In 2025, roughly 15 million barrels per day of crude oil and five million barrels per day of oil products transited the strait, about 20 percent of global supply. Cumulative losses exceed one billion barrels, and the IEA says supplies from the affected region remain 14.4 mb/d below pre-war levels, with global supply 12.8 mb/d short. Even with a swift reopening, restarting facilities would take months, leaving markets undersupplied into 2027.