Oil Crisis Deepens as Supply Loss Tops 1B Barrels

Saudi oil giant Aramco says the world has lost about one billion barrels of oil since the joint US-Israeli war of aggression against Iran triggered the most severe shipping disruptions ever recorded in the Strait of Hormuz , according to statements reported by Press TV on May 10. With Hormuz tanker traffic still restricted, cumulative supply losses from Gulf producers already exceed 1 billion barrels with more than 14 million barrels per day of oil now shut in , the International Energy Agency confirmed in its May oil market report.

The scale of the disruption is staggering. Shipping traffic through the Strait of Hormuz, a major maritime choke point for world energy trade, has been largely blocked by Iran since 28 February 2026, when the United States and Israel launched an air war against Iran and assassinated its supreme leader, Ali Khamenei . In total, production among OPEC members has dropped more than 30%, or 9.7 million barrels per day, during the war , CNBC reported Wednesday, citing the cartel's latest monthly update.

According to market data, WTI crude traded at $71.50 per barrel on Wednesday, up 0.6%, while Brent crude stood at $75.20 per barrel, up 0.5%. Henry Hub natural gas prices fell 2.4% to $3.25 per MMBtu.

Can Stockpiles Bridge the Gap Until Hormuz Reopens?

The rapidly shrinking stockpiles mean that the risk of even more extreme price spikes and shortages is getting ever-closer, leaving governments and industries with fewer options to cushion the impact of the loss of more than a billion barrels of supply. Morgan Stanley estimates global oil stockpiles dropped by about 4.8 million barrels a day between March 1 and April 25 , Fortune reported May 9.

Oil inventories are depleting at a record pace due to the mounting supply loss from the closure of Hormuz. Inventories fell by 250 million barrels, or 4 million barrels per day, over March and April , according to the IEA. IEA member countries agreed on 11 March to make available an unprecedented 400 million barrels of oil from their emergency reserves available to the market to mitigate the negative impact on economies from the supply disruptions , the agency said in its March report.

But the emergency releases are proving insufficient. Oil inventories in the Asia-Pacific region outside of China have been hit hardest, falling by about 70 million barrels since the conflict began. Kayrros said stockpiles in Japan and India are at an at least 10-year seasonal low, down 50% and 10%, respectively, since the war began , according to Fortune.

Will China's Xi Help Trump Reopen the Strait?

President Donald Trump arrived in Beijing on May 13 for high-stakes talks with Chinese President Xi Jinping, with the Iran war and energy security dominating the agenda. Leaders agreed the Strait of Hormuz must remain open to ensure global energy flows, while Xi expressed opposition to its militarization and signaled interest in buying more U.S. oil , Fox News reported.

The purchase of Iranian oil and the security of global energy flows and commodities through the Strait of Hormuz will dominate discussions during US President Donald Trump's two-day visit to China from May 14. Though the US scrutiny of Beijing's conduct will be intense, Mr Trump is unlikely to walk away with a win on stemming the flow of Iranian crude to Chinese ports from the presidential summit , according to The National.

The U.S. Energy Information Administration estimates that China added an average of 1.1 million barrels per day of crude oil to strategic reserves in 2025, with preliminary government data indicating that China has continued to build inventories in 2026 ahead of the Iran conflict. This means that government and commercial oil stockpiles in China averaged around 360 million barrels in December 2025 , CNBC reported May 10.

While Kalshi traders see a 79% chance a soybean purchase is announced, oil purchases have a much lower probability at just 24% , CNBC noted Wednesday.

Big Oil Pivots to New Frontiers

The crisis is reshaping global energy investment patterns. Eneos Holdings said on Thursday it will buy U.S. major Chevron's 50% stake in Singapore Refining Company (SRC) and other assets in Southeast Asia and Australia for nearly $2.2 billion in its first refining foray beyond Japan. The deal - which includes Chevron's assets in Vietnam, Australia, Philippines and Malaysia - is expected to close in 2027 , Reuters reported.

With a total investment of $10.5 billion, the GranMorgu project is of vital importance to the country. A significant proportion of the investments will be made locally, contributing to local employment and economic development in Suriname , TotalEnergies said in April. The fields are located 150 km off the coast of Suriname and hold recoverable reserves estimated at over 750 million barrels , the company announced in October 2024.

The Financial Times reported May 14 that Suriname, South America's smallest and greenest country, is tying its future to the offshore oil development led by TotalEnergies.

AI's Energy Appetite Meets Its Own Solution

While traditional energy markets grapple with supply shocks, artificial intelligence is creating its own energy challenges—and potentially solving them. Electricity demand from data centres soared by 17% in 2025, and that of AI-focused data centres climbed even faster – well outpacing growth in global electricity demand of 3%. As a result, electricity consumption from data centres is set to double by 2030, and power use from those focused on AI is poised to triple , the IEA reported in April.

OilPrice.com reported May 13 that researchers are increasingly employing artificial intelligence to help them solve some of the biggest challenges facing the energy sector—including the massive spike in energy demand caused by large language models themselves.

Morgan Stanley Research forecasts U.S. data center demand could reach 74 GW by 2028, with a projected shortfall of about 49 GW in available power access. This scale of growth requires billions in capital for new energy infrastructure , the investment bank said in February.

Natural Gas Markets Navigate Production Cuts

U.S. natural gas markets are experiencing their own volatility. Domestic production has also eased slightly, with Lower 48 output slipping to about 109.3 bcfd from April levels, as low spot prices prompted some producers, including EQT, to curb output , Trading Economics reported May 12.

Natural Gas Intel reported May 13 that June natural gas futures recovered some lost ground Wednesday but again stalled below $3.00/MMBtu, as a fresh drop in Lower 48 production and an approaching heat wave gave bulls momentum.

U.S. marketed natural gas production averaged 120.2 Bcf/d in 1Q26, up 4% from 1Q25. We expect production to keep rising through 2027, with associated natural gas output increasing as higher crude oil prices support more crude oil production , the EIA said in its May 12 Short-Term Energy Outlook.

Cuba's Energy Emergency Deepens

The global energy crisis is hitting vulnerable nations hardest. Cuba has completely run out of diesel and fuel oil, the country's energy and mines minister said on Wednesday, as the capital, Havana, faces its worst rolling blackouts in decades amid a US blockade that has strangled the island of fuel. "We have absolutely no fuel (oil) and absolutely no diesel," Energy Minister Vicente de la O said on state-run media , Reuters reported May 13.

Blackouts have increased dramatically this week and last across the capital, Havana, with many neighbourhoods without light for 20 to 22 hours a day, the minister said, heightening tensions in a city already exhausted by food, fuel and medicine shortages , according to Free Malaysia Today.

Neither Mexico nor Venezuela, once top suppliers of oil to Cuba, have sent fuel to the island since Trump's January 2026 executive order threatening to slap tariffs on any country shipping fuel to the communist-run nation. Only a single large oil tanker, the Russian-flagged Anatoly Kolodkin, has delivered crude oil to Cuba since December, providing temporary relief to the island in April , Daily Maverick reported.

What Changed This Week

The energy landscape shifted dramatically as Saudi Aramco confirmed the billion-barrel supply loss milestone, crystallizing the unprecedented scale of the Hormuz disruption. Trump's arrival in Beijing for talks with Xi Jinping brought energy diplomacy to center stage, though analysts remain skeptical about immediate breakthroughs on Iranian oil flows. Meanwhile, Eneos closed its $2.2 billion acquisition of Chevron's Singapore refining assets, signaling how major oil companies are repositioning amid the crisis. Cuba's complete depletion of diesel and fuel oil reserves underscored the human cost of the global energy crunch.

What to Watch

The EIA's next Short-Term Energy Outlook on June 9 will provide updated forecasts on how long the Strait of Hormuz disruption might persist. Trump and Xi's summit concludes May 15, with markets watching for any concrete agreements on energy cooperation or Iranian oil purchases. The IEA's June oil market report will reveal whether inventory drawdowns are accelerating or stabilizing. OPEC's monthly report, expected mid-June, will clarify how the UAE's departure affects the cartel's spare capacity calculations. And natural gas traders are eyeing the EIA's weekly storage report Thursday for signs of how production cuts are affecting injection season dynamics.