Iran’s control of the Strait of Hormuz takes nearly 19 Mb/d offline
The control of the Strait of Hormuz holds approximately 19 million barrels per day (Mb/d) of crude oil and refined products. This decision paralyzes Iraqi exports from Basra, around 3.4 Mb/d, Iranian exports from the Kharg Island (1.6 Mb/d), and a significant portion of Emirati and Kuwaiti flows. Asian refiners, heavily reliant on the Gulf for their supply, are now left without their usual source. The crisis described in Argus Media’s report leaves no doubt about the current situation.
A single point of failure risk
This shock exposes a well-known structural vulnerability of logisticians. They have concentrated their flows on a single passageway. In terms of port risk management, this is the realisation of a “single point of failure” risk on a global scale. To address the crisis, as Argus Media continues, they are turning to alternative routes. However, putting pressure on these infrastructures with limited capacities risks causing new congestions.
Iranian strikes on Yanbu
Thus, the Saudi East-West oil pipeline (Petroline, 7 Mb/d) to Yanbu, on the Red Sea, serves as the main security valve. It has a capacity of 2.6 Mb/d. With the conflict, it is now running above its nominal capacity at around 4.8 Mb/d. But this infrastructure has now become a target. Indeed, the Samref refinery in Yanbu (400,000 b/d) was hit by Iranian strikes on March 18 and 19. Meanwhile, the port of Fujairah perfectly illustrates the fragility of bypass solutions. Situated outside the strait, on the Gulf of Oman, it is considered a strategic and secure hub. However, it is only 140 km away from the Iranian coast. This exposes it to drone strikes. Its loading capacities have dropped from 1.94 Mb/d to less than 1.2 Mb/d in three weeks. Argus Media forecasts that its bunkering volumes could drop by a tenth of its March level, according to Argus data. The port typically handles between 500,000 and 550,000 tons of bunkering per month.
Asian refiners’ response: Urgent diversification of supplies
Asian buyers are racing to diversify their sources of supply. American WTI (comprising a blend of light Texas oil) has become the primary safe haven. Japan has secured more than 530,000 b/d for delivery in June. This marks a doubling of its previous import record from the United States. ExxonMobil Singapore is redirecting its Jurong refinery (592,000 b/d) to this product after years of absence. Thailand is also returning to this market. This is a reversal as the country had been absent since 2018. At the same time, production constraints are increasing. Formosa Petrochemical (Taiwan) has reduced margin rates by 60% at its refinery in Mailiao. Japanese refinery rates saw their sharpest weekly decline since May 2024. These operational adjustments reflect a harsh logistic reality: substituting a 14 Mb/d flow cannot be assured quickly or without massive additional costs.
The geographical challenge of the international response
The emergency release of 426 Mb by IEA members is faced with a logistical geography obstacle. Indeed, 28 of the 32 IEA members are located in the Atlantic basin. Overcapacity of freight on east-west routes is being squeezed by high freight rates. Without specific contract destination clauses for this release mechanism, the direction of these barrels towards Asia relies more on diplomacy than logistics. This crisis serves as a case study for any maritime logistics professional. It bluntly reminds that the robustness of a supply chain corridor is not only measured by its nominal capacity, but also by its resilience to geopolitical shocks. It highlights the real availability of alternative routes and the ability of substitution ports to ramp up quickly. Ensuring operational continuity in a context of increasing geopolitical risks is no longer an option but a strategic necessity.
