Stock prices have sold heavily on the back of the central narrative that Hormuz closure is blocking 20m barrels or 20% of the world oil exports. However, in reality the disruption is at best half this number:
\- Saudi Arabia has already diverted 5.9m b/d to its Yanbu terminal on the red sea, and its on track to reaching the maximum capacity of 7m b/d within days. (https://www.reuters.com/graphics/IRAN-CRISIS/MAPS/znpnmelervl/#gulf-oil-producers-scramble-to-bypass-hormuz-as-iran-locks-down-the-strait).
\- UAE is exporting 1.8m b/d through its Habshan-Fujairah pipeline which bypasses Hormuz into the Gulf of Oman. (https://www.reuters.com/graphics/IRAN-CRISIS/MAPS/znpnmelervl/#gulf-oil-producers-scramble-to-bypass-hormuz-as-iran-locks-down-the-strait).
\- Iran itself is still exporting 1.1m to 1.5m b/d through Hormuz (https://www.reuters.com/graphics/IRAN-CRISIS/MAPS/znpnmelervl/#gulf-oil-producers-scramble-to-bypass-hormuz-as-iran-locks-down-the-strait).
\- Iraq has diverted just under 0.5m b/d of exports through its northern pipelines to Turkey (https://www.bloomberg.com/news/articles/2026-03-17/iraq-and-kurdistan-reach-deal-to-resume-oil-exports-via-turkey)
The above means between 10m and 11m b/d are being exported through alternative routes. This still leaves 9 to 10m b/d blocked, but with the IEA releasing 400m barrels and Russian oil sanctions relaxed (100m barrles). The world remains well supplied. Of course if the war were to be sustained for months, and energy production facilities were to be destroyed, the world will start to experience a shortage, but as things stand today, there is no shortage, this is why oil prices are still half their 2008 peak on inflation adjusted basis, despite the so called biggest oil disruption in history.
