Oil Supply Risks Rise as Strait of Hormuz Closure Threatens Exports from Iraq and Kuwait

BY MIRABLE ODETA

Global oil markets are facing the risk of major supply disruptions as exports from Iraq and Kuwait could begin shutting down within days if the Strait of Hormuz remains closed amid the escalating Middle East conflict.

Analysts at J.P. Morgan warned in a research note that crude supply losses could reach about 3.3 million barrels per day (bpd) by the eighth day of the disruption if tankers remain unable to pass through the critical shipping route.

According to the bank’s assessment, Iraq and Kuwait have limited time before their export systems begin to shut down. Iraq could continue shipping oil for roughly three days, while Kuwait may have around 14 days before storage capacity is exhausted and exports must be halted.

The Strait of Hormuz, a narrow but strategically crucial waterway connecting the Persian Gulf to the Gulf of Oman, is one of the world’s most important energy transit routes. Nearly **one-fifth of global oil and liquefied natural gas shipments** move through the channel, making any disruption there a major threat to global energy markets.

If the closure continues for an extended period, supply losses could deepen significantly. J.P. Morgan estimates that disruptions could grow to 3.8 million bpd by around day 15 and potentially reach 4.7 million bpd by day 18, amplifying pressure on global oil prices and energy supplies.

Officials from Iraq’s oil sector also warned that the country could soon be forced to sharply cut production. Two Iraqi oil officials said Iraq may have to reduce output by more than 3 million barrels per day if oil tankers are unable to pass through the Strait of Hormuz to reach export terminals.

Meanwhile, geopolitical tensions continue to escalate. Donald Trump said the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz if needed to keep shipments moving.

At the same time, Iranian media reported that a senior official from the Islamic Revolutionary Guard Corps declared the strait closed and warned that Iran would fire on any vessel attempting to pass through the waterway.

The situation has heightened fears of a wider disruption to global energy flows, with analysts closely monitoring developments that could further tighten supplies and push oil prices higher in the coming days.