Part of ADI Analytics’ ongoing coverage of the implications of the Iran conflict across oil & gas, LNG, refined products, and chemicals.
The global energy landscape has been fundamentally altered by the ongoing conflict in the Middle East. Following the onset of hostilities on February 28, 2026, the Strait of Hormuz remains functionally impaired, stranding approximately 15 million barrels per day of crude oil. While recent reports indicate a slight uptick in selective transits under IRGC‑controlled corridors, vessel traffic remains down roughly 70% from pre‑war levels.
In this post, we focus on upstream oil markets and the resulting impacts on operators, oilfield service and equipment providers, and investors.
Recent developments include a coordinated emergency release of roughly 400 million barrels from strategic reserves by the IEA, intended to bridge the immediate supply gap. Even at this scale, the release is mathematically sufficient to offset a disruption of approximately 14 million bpd for only about one month. At the same time, the U.S. and its allies have intensified strikes on Iranian military infrastructure, while Iran has retaliated by targeting regional energy assets, including a refinery and desalination facility in Kuwait. Together, these dynamics point to a disruption that markets increasingly view as structural rather than temporary.
ADI Analytics has modeled three potential trajectories based on the duration and severity of the blockade, summarized below:
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