The volume of oil transported through the Strait of Hormuz is well-documented. Global oil consumption stands at 102 million barrels per day, while global oil trade amounts to 75.7 million barrels per day. Approximately 20.1 million barrels per day pass through the Strait of Hormuz, accounting for about 20% of global consumption and 26% of global trade. This includes roughly 14 million barrels per day of crude oil and condensate, and about 6 million barrels per day of petroleum products. Among exporting countries: Saudi Arabia contributes 5.4 million barrels per day, Iraq 3.3 million, the UAE 2 million, and Iran 1.7 million. Among importing regions: 84% of exports go to Asia, with China importing 4.6 million barrels per day, India 2.1 million, and Japan and South Korea also representing significant shares. For petroleum products: Diesel is shipped to Africa and Europe; jet fuel goes to Europe; gasoline exports are more geographically dispersed. Chemical feedstocks like LPG and naphtha primarily head to Asia, with LPG mainly destined for India and China, and naphtha primarily shipped to Japan and South Korea.

The blockade is currently nearly total, with only a small number of vessels managing to evade it. On the evening of March 3, some Greek-flagged Suezmax-class vessels transited the strait by turning off their AIS systems; estimates range from one to five ships, reflecting varying risk appetites. The probability of evasion is relatively higher for Suezmax and smaller vessel classes. However, it is particularly difficult for VLCCs (Very Large Crude Carriers), which also carry greater risks, such as a higher propensity for fires, compared to container ships or smaller vessels. According to Clarksons data, 112 crude oil tankers are currently stalled in the Gulf region. This includes 70 VLCCs, representing about 8% of the global VLCC fleet. Additionally, there are 11 Suezmax, 23 Aframax, and 57 Handysize tankers in the area, along with approximately 195 product tankers, constituting about 4% of the global product tanker fleet.

For a historical analysis of blockades in the Strait of Hormuz, refer to the special report "Crude Oil Trends Amid US-Iran Conflict." Revisiting the timeline of the "Tanker War" during the Iran-Iraq conflict (1980-1988): The Iran-Iraq war began in 1980 but initially did not involve the Strait of Hormuz. Starting in September 1985, tactics shifted to target all commercial vessels from Gulf nations and third countries supporting Iraq, including those transiting the Strait of Hormuz. By late 1986, due to frequent attacks, Kuwait requested military escorts from the five permanent UN Security Council members. US and Soviet naval forces prepared to intervene in the Persian Gulf. Attacks peaked in 1987, with 178 vessels targeted that year. Resolution: In June 1987, the US formally launched "Operation Earnest Will," providing military escorts for Kuwaiti tankers and deploying carrier strike groups to the Persian Gulf. Impact on oil prices: Oil prices rose from around $15 per barrel at the end of 1986 to $19, then corrected to approximately $16. However, as disruptions in the strait persisted, prices surged significantly, reaching nearly $23 per barrel in the first half of 1987. Following the initiation of US escorts in July and August 1987, prices gradually declined until the conflict subsided after US military actions. Logistics data reference: Data from the period is limited. US imports from Gulf nations declined from about 2.2 million barrels per day after 1980 to roughly 300,000 barrels per day, before gradually recovering to 1.7 million barrels per day by 1990, not surpassing previous highs until after 2000.

The duration of the blockade is a critical factor. It has persisted for five days so far. If resolved within one week, temporary measures such as reduced consumption, halting strategic reserve replenishment, and releasing strategic reserves could mitigate the impact, potentially containing oil prices in the $80-$90 per barrel range. If the blockade continues for several weeks or longer, oil price movements could mirror those seen during the Russia-Ukraine conflict, exceeding $100 per barrel. Should prices surpass $120 per barrel, the risks of a liquidity crisis and economic recession would increase, potentially spilling over into other major asset classes.

According to Kpler data, China's total oil inventories are approximately 1.2 billion barrels. This includes about 900 million barrels in commercial and strategic petroleum reserves (SPR), and around 300 million barrels held at refineries. China's consumption is about 12 million barrels per day. Over the past decade, the inventory-to-sales ratio was lowest in 2018, with inventories at 800 million barrels and consumption at 10 million barrels per day. Using the same ratio, China could potentially release about 240 million barrels from strategic reserves (the 2018 ratio implied 80 days of cover; for 2025, a desired inventory level would be 80 days * 12 million barrels/day = 960 million barrels. 1.2 billion - 960 million = 240 million barrels). Given an estimated disruption of 5 million barrels per day via the Strait of Hormuz, these reserves could cover approximately 50 days. (Note: This is a rough calculation methodology). Other Asian regions: According to FGE data, India, Japan, and South Korea have relatively limited inventories and may be more significantly affected.

According to JPMorgan, in the event of a supply disruption, Iraq's storage capacity would last only about 6 days; some Iraqi oil fields have already suspended production. The UAE and Qatar could maintain supplies for approximately 14-20 days, while Saudi Arabia could sustain over 36 days. In this context, the production increase plan agreed by OPEC+ on March 1 is unlikely to be realized.

Floating storage could potentially serve as a supplement. In September and October 2025, US sanctions targeting Chinese ports, refineries, and two major Russian oil companies, aimed at curbing trade in sanctioned oil, led to a significant increase in floating storage by approximately 200 million barrels. Under strict sanctions, this oil can be considered "off-the-books." However, if supply disruptions persist, there is a possibility that sanctions could be relaxed to supplement the market. Reports indicate India is considering resuming purchases of Russian oil. Furthermore, on March 6, US Treasury Secretary Besant announced a 30-day temporary waiver allowing Indian refiners to purchase Russian oil to ensure continued flow into global markets.

Petroleum product markets are experiencing more volatility and a sharp rise in crack spreads due to smaller trade volumes, higher regional dependency, and recent structural factors. These include refining capacity contraction in the West, China restricting product exports, operational instability at new Middle Eastern refineries, and limited Russian exports due to sanctions. These conditions mean even temporary regional shortages can cause significant crack spread premiums. Among products transiting the Strait of Hormuz, diesel and jet fuel are primarily destined for Europe. Diesel cracks are approaching levels seen during the Russia-Ukraine conflict, while jet fuel cracks have far exceeded historical highs.

Regarding the transmission to chemical products, a chemical industry salon in November 2025 suggested watching for cyclical bottoms in chemicals. How has the logic changed since then? Preventive and actual feedstock shortage-related production cuts have already occurred in multiple regions, including the Middle East, Japan, South Korea, and China. Chemical feedstocks like LPG and naphtha passing through the Strait of Hormuz are crucial for Japan, South Korea, China, and India. The constraints are significant, especially for steam crackers in Japan and South Korea that have high import dependency and low storage, making them more vulnerable. Feedstock shortages could persist and intensify. The logic has shifted from November 2025 in three key aspects: (1) Supply-side logic: In November 2025, the industry was at its most pessimistic amid substantial fundamental pressure, but valuations were compressed to extremes. From a capacity cycle perspective, aromatics were expected to bottom out in 2026, and olefins in 2027-2028. Currently, supply disruptions are directly causing refinery run cuts, reducing supply. (2) Demand logic: In November 2025, inventory holding willingness across the industry was minimal due to pessimistic expectations; strict hedging was prevalent with no inventory buildup or open positions. Currently, sharp price increases have triggered panic buying downstream, increasing willingness to hold inventory. (3) Currently, as transmission effects develop gradually and原油 volatility far exceeds that of chemicals, profit margins remain compressed, and valuations are not high.

China's crude oil futures (SC) are directly benchmarked against Middle Eastern crude. Although the deliverable grades include Shengli crude from China and Tupi crude from Brazil, these have never been delivered. The pricing formula essentially calculates: Middle Eastern crude price + freight + insurance/warehousing/quality inspection, etc. Following the conflict outbreak, freight rates from the Middle East to China surged to $15 per barrel. Based on an $85 per barrel Middle Eastern crude price, this could imply a benchmark near $100 per barrel. Important considerations: (1) Insurance premiums are difficult to estimate reliably as insurers face high risks; (2) This benchmarks the cost of new shipments from the Middle East to China. However, China could potentially use crude that transited the strait before March for delivery, which would not carry the high geopolitical risk premium and freight costs, though accessing such volumes requires significant resource capability. Whether deliverable supplies can be supplemented with Brazilian Tupi crude is a question for AI analysis.