The month a strait became a price

On 28 February the United States and Israel launched joint air strikes on Iran¹. On 2 March Iran’s Revolutionary Guards announced the closure of the Strait of Hormuz, and traffic fell to an average of about five vessels a day, against roughly a hundred before the war⁴. By the time the IEA published its March oil report on the 12th, flows of crude and products through the strait had gone “from around 20 mb/d before the war to a trickle”, and Gulf producers had cut output by at least 10 million barrels a day¹. The agency called it “the largest supply disruption in the history of the global oil market”¹.

The screen and the cargo. The physical price moved first and furthest. On the EIA’s spot series Brent was $71.32 on 27 February and $126.69 on 31 March, a rise of about 78% in a month on the desk’s arithmetic⁵. Futures were calmer: the IEA noted Brent futures had traded “within a whisker of $120” before easing to around $92 as it went to press¹. Two prices, one barrel, and the gap between them was the cost of actually having the oil.

The cupboard opened. On 11 March all 32 IEA member countries agreed unanimously to make 400 million barrels of emergency stocks available². It was the sixth collective action since the agency was founded in 1974, after 1991, 2005, 2011 and twice in 2022², and by the IEA’s own description “by far the largest ever”³. Members held more than 1.2 billion barrels of emergency stockpiles, plus 600 million barrels of industry stocks held under government obligation².

Same units, please. Four hundred million barrels sounds like an answer. Measured against a disruption of nearly 20 million barrels a day¹, it is about twenty days of the missing flow, on the desk’s arithmetic, released over months rather than days³. The IEA said as much, in calmer words: the release was “a significant and welcome buffer”, and the most important factor for stable flows was “the resumption of regular transit of shipping through the Strait of Hormuz”³.

Hindsight. March taught the year’s central lesson early. Stocks buy time; corridors decide prices. Every later month in this ledger is, in one way or another, a footnote to that sentence. If you run a business with a fuel bill, the useful question from March was never “how much is being released?” but “when do ships move again, and who insures them?”