How the Strait of Hormuz Crisis Reshaped Global Oil Markets

The conflict triggered by U.S. and Israeli strikes on Iran on February 28, 2026 effectively shut the Strait of Hormuz to normal commercial traffic, causing a near-total collapse in vessel transits, a surge in charter rates to record levels, a spike in diesel crack spreads to all-time highs, severe refining disruptions across Asia, and a roughly 60–70% rise in global oil benchmarks before some retreat .

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Oil Tanker Traffic Through the Strait

Before the conflict, roughly 90–110 vessels transited the Strait of Hormuz daily . Traffic dropped by more than 90% at the height of the disruption, at times reaching near-zero . By early March 2026, the number of daily tanker passages had fallen to zero . As of early August 2026, transits remained sharply depressed: Kpler recorded only about 8 vessels crossing on some days in early August, with the waterway all but closed while Iran and Oman negotiate a 60-day reopening framework . On July 9, just 2 oil tankers were reported crossing .

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Charter Rates and Daily Vessel Economics

VLCC (Very Large Crude Carrier) daily charter rates surged to approximately $500,000 per day — nearly ten times normal levels S. Sinokor Maritime secured a VLCC at close to $500,000/day for a Hormuz voyage as of August 10 . Reliance Industries paid between $23–25 million to charter a single supertanker to lift Iraqi crude — among the highest freight bills recorded during the conflict . A VLCC was booked at 897 Worldscale points (nearly 9x standard) for a Persian Gulf-to-India voyage in late June . Gulf oil tanker rates roughly doubled in June 2026 as traffic slowly picked up during a brief ceasefire, before collapsing again with renewed hostilities .

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Diesel Crack Spreads and Asian Refiners

Diesel crack spreads pushed past $60 per barrel to reach a record high in July 2026 S. The price difference between crude oil and refined products kept growing as refineries struggled to obtain crude S. Asian refineries slashed runs, shut units, or declared force majeure since March 2026 S. Production of diesel and jet fuel declined by at least 1 million barrels per day in April 2026 S. Asian crude imports hit a 10-year low S. Major refineries in Saudi Arabia, Bahrain, Kuwait, and the UAE remained partially or entirely offline after the Strait closure S. China sharply reduced refinery runs to compensate for crude shortages, but this has not been enough to offset global fuel supply tightness .

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Broader Market Implications

Oil prices: Brent crude jumped 8% from $71.32 (Feb 27) to $77.24 per barrel (Mar 2) within two trading sessions . Oil surged roughly 60–70% in 26 trading days, with WTI climbing from $66.96 (Feb 27) to $104.69 (Mar 30). Brent traded close to $116 per barrel at the late-March peak . As of August 10, 2026, Brent is around $84.46/barrel and WTI around $78.84/barrel, as hopes for a reopening deal with Iran have oscillated . Goldman Sachs estimated traders are pricing in roughly $14/barrel of conflict risk premium .

Energy stocks: The S&P 500 energy sector surged alongside oil prices in the early weeks of the war . The rapid price run-up in oil (faster than the 2022 Russia-Ukraine shock) boosted energy equities broadly .

Global benchmarks: Brent crude experienced extreme volatility — falling 11% in a single day in May 2026 on hopes of a reopening deal . European natural gas prices rose more than 70% since the conflict began, though below 2022 crisis peaks . IEA data shows Gulf countries cut total oil production by at least 10 million barrels per day due to the inability to export through the strait .

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Bank of America's Warning on Shipping Shortages

Insufficient evidence was found in the available search results regarding Bank of America's specific warning that "10 times more ships are needed to stabilize supply." The search budget was exhausted before a targeted check could be completed. However, the context aligns with the broader picture: with daily VLCC charter rates at ~$500,000 and a single supertanker costing $25 million to charter , a massive shortage of available vessels willing to transit the high-risk waterway is evident. VLCC rates at roughly 9–12x normal Worldscale levels are consistent with the kind of structural shipping deficit such a warning would describe. If this is a specific BofA research note, a manual search of BofA Global Research or a financial data terminal would be needed to confirm the exact number and language.

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Key caveat: The conflict began on February 28, 2026 (not 2025 as referenced in some sources). All dates in the sourced materials refer to 2026.