The Strait of Hormuz Crisis: Eni CEO Claudio Descalzi on the 'Most Important Event in 40 Years' Reshaping Global Energy

Price Masking the Severity

A key insight from Descalzi's July 16 testimony is that the true scale of the problem is not yet visible in crude oil prices . OECD countries have drawn down approximately 400 million barrels of strategic petroleum reserves and released them into the market, which has kept Brent crude in a range of $90 to $100 per barrel . Descalzi said the price has "not yet certified" this as a major problem, because these emergency releases have been the safety valve .

Short-Term Crisis Risk

In a separate interview with Il Sole 24 Ore on July 11, Descalzi warned that "in the short term, it's possible" the energy crisis worsens as oil inventories decline and competition for supplies intensifies . He also noted that European countries will need to secure roughly 35 billion cubic meters of gas to refill storage facilities ahead of winter .

The Real Bottleneck: Not Crude Oil, But Refined Products and Gas

Descalzi drew an important distinction that many market observers have missed :

• Crude oil continues to flow through the strait, albeit in smaller volumes and with difficulty .
• Diesel, jet fuel, and natural gas are the real problem. These products are harder to source via alternative routes, making European supply chains especially vulnerable .

He noted that approximately 8-9 million barrels of crude are still moving, but the refined product gap is far more difficult to fill .

Implications for Oil Prices

The Finite Buffer

The 400 million barrels of OECD reserves released have contained crude prices so far, but this buffer is finite. The Brookings Institution previously noted that IEA Executive Director Fatih Birol stated the coordinated release was adding roughly 2.5 to 3 million barrels per day to the market — but that this could be spent by July or August . Once stocks are depleted, price caps will likely break .

Market Outlook is Fragile

A Reuters poll published June 30 found analysts had cut their 2026 oil price forecasts for the first time since the Iran war began, after five straight monthly increases, as a partial reopening of the Strait of Hormuz eased supply concerns . The survey of 31 economists and analysts forecast Brent crude would average $84.50 per barrel in 2026, down from $90.44 projected the previous month .

However, that optimism may be short-lived. The IEA warned on July 10 that renewed U.S.-Iran hostilities could flip the outlook back to an oil market deficit . Oil prices had plunged after the June memorandum of understanding with Iran, with North Sea Dated prices falling $31 per barrel to $68 by early July — their lowest since January and $2 below pre-war levels — but the re-escalation has put that relief at risk .

Broader Context

The IEA estimated earlier in the crisis that oil output from affected countries was down more than 14 million barrels per day, describing this as the "largest supply disruption in the history of the global oil market" . Brookings analysts concluded that prices will rise further if the strait stays closed, and that markets will take months to normalize after any reopening . The World Bank noted the oil market faced a projected 3.7 million barrels per day deficit in Q2 2026 due to reduced Middle East production .

Earlier in the crisis, Brent crude had surged past $126 per barrel at its peak, with the largest-ever monthly increase in oil prices occurring in March 2026 .

European Energy Security

EU Policy Under Pressure

Descalzi has also called on the European Union to reconsider its planned ban on Russian gas imports, arguing that the Hormuz disruption makes the bloc too dependent on a narrowing set of suppliers . Russia is currently facing a ban on short-term LNG import agreements beginning April 2026, with a complete embargo on long-term contracts starting January 1, 2027 . Descalzi expressed uncertainty about how the EU would substitute approximately 20 billion cubic meters of LNG currently sourced from Russia .

Supply Structure "Completely Eroded"

According to Descalzi, the old architecture based on Russian and Middle Eastern flows is gone, meaning Europe faces a permanent reconfiguration of its energy import routes . He emphasized that even when peace is established in the Middle East, the risk attached to the region will be higher than before .

Immediate Vulnerability

Europe is exposed to diesel and gas shortages from the blockade because alternative supplies from the Americas and elsewhere take longer to reach the continent . Descalzi warned that Europe will remain heavily dependent on U.S. liquefied natural gas to rebuild storage before winter .

Broader Market Shift: A Permanent Reorientation

Strategic Investment Shift

The oil and gas industry is diversifying investments toward Southeast Asia and Latin America in reaction to the prolonged disruption of shipping flows in the Strait of Hormuz . Speaking at the July 16 parliamentary hearing, Descalzi said that major producers — including Russia and Gulf nations — are likely to face long-term supply constraints, and he underscored the importance of North and Sub-Saharan Africa as well . This shift will persist even after the Hormuz crisis ends .

Economic Spillover

Bloomberg reported that growth forecasts are being cut worldwide and shortages are emerging across Asia (Thailand, Pakistan) as the shock heads westward . If the strait remains closed, the world will need to significantly reduce oil and gas consumption — but only after prices spike enough to force demand destruction . Bloomberg Economics projected that at around $110 per barrel oil, a global recession would be triggered . U.S. government officials and Wall Street analysts have started considering the prospect of oil prices reaching an unprecedented $200 per barrel .

The Bottom Line

Descalzi's analysis points to a world that has fundamentally changed. The safety valves of strategic reserves are running low. The crude oil price, hovering around $85 after a brief fall to $68 following the June accord, does not yet reflect the severity of the disruption . The real pain — in diesel, jet fuel, and natural gas — is mounting, particularly for Europe. And the industry's response is not a temporary pivot but a permanent re-routing of global energy investment away from the Middle East .