With the US–Israel war on Iran grinding on, the Strait of Hormuz remained effectively closed on 14–15 May 2026 — except for some Chinese ships Tehran allowed through after Xi pledged not to arm Iran. Brent crude jumped above $106/bbl and is on track for a 5%-plus weekly gain. The IEA warns the global market could stay materially undersupplied through October.
The Numbers
- Brent crude: above $106/bbl, +5%+ on the week
- WTI: hovering around $100/bbl
- Vessels through Hormuz: ~30 in recent hours (mostly Chinese)
- Flow loss: Crude/fuel through Hormuz down ~4M bpd Mar–Apr
- IEA: “Materially undersupplied” through October
The China Exemption
- Iran allowing select Chinese-flagged tankers through Hormuz
- Concession secured after Xi pledged not to arm Iran
- Effectively positions China as the privileged buyer of Iranian oil
- Other Asian buyers (India, Japan, South Korea) shut out of cheap crude
Why It Matters
- Hormuz typically carries ~20% of world oil flows
- Sustained closure resets the global price floor
- Africa importers (Ghana, Nigeria, Kenya) facing renewed FX + fuel shock
- Refining margins squeezed as crude/distillate dynamics misalign
What To Watch
- Whether US/Israel agree to a ceasefire window
- Insurance + tanker-rate inflation
- OPEC+ response — barrel releases vs discipline
- Reserve drawdowns: US SPR + IEA member coordination
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