Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeFinancial TimesOil traders warn market is close to running on empty as Hormuz shuts againStockpiles that acted as shock absorbers early in Iran war are running low as key waterway closes once moreAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.The post-ceasefire decline in oil prices came amid a temporary glut, as Gulf countries rushed to empty their brimming storage tanks, funnelling millions of barrels through Hormuz. Photo by AFP via Getty ImagesOil traders are warning that the latest flare-up of tensions in the Strait of Hormuz marks a risky new phase for the market, which is facing fresh disruption without the stockpiles that helped avert a wider economic crisis earlier in the United States-Iran war.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorThis week’s breakdown of the ceasefire between Washington and Tehran has again largely shut the strait, ending a brief surge of shipments through the waterway that normally carries about a fifth of the world’s oil supplies.The latest threat to Gulf crude exports comes after the International Energy Agency said on Friday that its member countries had released almost three-quarters of the planned 400 million-barrel emergency stock release that was announced in March, meaning there are only a few more weeks to go before those supplies to the market dry up.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“We’ve burned through all of the buffers we had. Everything,” said one trader. “All of that’s now gone,” he said.Oil prices fell sharply after the ceasefire was first announced, dropping from about US$100 a barrel to just above US$70.But in a sign of traders’ renewed anxiety, Brent crude surged above US$87 on Tuesday, the highest level in more than a month. It traded at about US$85.50 on Wednesday, up 13 per cent this week.During the four-month closure before last month’s U.S.-Iran agreement to reopen the strait, governments in the west and Asia pulled almost every lever available to them to ensure the supply crunch did not undermine the world economy.Western powers released record volumes of strategic oil reserves, China cut its oil imports in half and made its state-backed companies pull fuel from inventories, while the White House even let it be known the U.S. could, in theory at least, intervene in futures markets if prices got out of hand.The result was that Brent crude peaked at US$126 a barrel in April, well below its all-time high, despite the IEA warning that the world was experiencing the worst supply disruption in history.But traders said that if the renewed closure of the strait lasts for months, with some suspecting Iran wants to keep the pressure on U.S. President Donald Trump ahead of the November midterm elections, it is not clear this time where the oil to make up the shortfall would come from.Amrita Sen, director of market intelligence at Energy Aspects, said that going into the war, the oil market had roughly 400 million barrels of excess inventories, not including strategic reserves controlled by governments.“Now we have close to nothing,” she said. “Market complacency around Hormuz flows is being severely tested.”Motorists have already felt the pain at the pump, with prices for petrol and diesel rising faster — and falling more slowly — than crude oil since the war started.Markets for refined fuels are now exceedingly tight, with additional disruptions affecting supplies from Russia, the world’s second-largest exporter of diesel, following a series of successful long-range Ukrainian drone strikes on its refining system.The IEA on Friday warned of a potential petrol and diesel supply crunch, and wholesale diesel futures in Europe have risen 14 per cent this week.While western powers had started to shun Russian fuel in the years following Moscow’s full-scale invasion of Ukraine, they are now having to compete for supplies with countries such as Turkey and Brazil that kept buying Russian diesel and now need to find alternatives.Widespread warnings about airlines potentially running out of jet fuel, as countries such as Kuwait are big suppliers, have not materialized, with refiners optimizing production and airlines curbing unprofitable flights.But inventories are expected to draw down over the peak demand summer period and will prove challenging to rebuild ahead of the winter holidays.Global oil inventories inched higher in June, according to the IEA, but the gains pale in comparison with drawdowns over the previous three months.The post-ceasefire decline in oil prices came amid a temporary glut, as Gulf countries rushed to empty their brimming storage tanks, funnelling millions of barrels through Hormuz so that they could free up the space they needed in order to restore production.Adnoc, the United Arab Emirates’ state oil company, sold via tender 84mn barrels alone, according to industry publication Argus, and was running a “shuttle” system through Hormuz to meet waiting supertankers still cautious about entering the Gulf.But Adnoc’s shipping arm said two of these supertankers, each able to carry about 2mn barrels, were targeted on Tuesday morning by Iran while sailing through the strait. At least one seafarer was killed.While Gulf suppliers have been able to reroute some of their exports — Saudi Arabia’s crude oil exports have risen to about 5 million barrels a day from its Red Sea ports, compared with the roughly 7 million barrels per day they sent through Hormuz before the war — others such as Iraq and Kuwait remain almost completely cut off.“Ultimately, the market was pricing an optimistic flow trajectory that now is clearly not on the table, at least… not until we get another round of diplomacy,” said Joel Hancock, a senior commodities analyst at Natixis Bank.At the same time, traders are monitoring the situation in the Red Sea following attacks by Yemen’s Houthis on Saudi Arabia after a strike on Sana’a international airport.The Iran-backed group brought shipping through the Red Sea largely to a halt for more than a year starting in late 2023. A resumption of the Houthi campaign would close off southern access to Yanbu, Saudi Arabia’s only oil shipping route outside the Strait of Hormuz, rattling oil markets further.© 2026 The Financial Times Ltd Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.