Ending US-Iran War Will Not Solve Global Oil Crisis Immediately: Report

The global oil market is set to remain under severe pressure for months even if a peace deal is reached, as structural supply disruptions and logistical delays continue to drain inventories, according to a new report by HFI Research.

The energy-focused research firm in their latest analysis said the market has already crossed a “breaking point,” with an estimated 11 to 13 million barrels per day of supply outage that will inevitably show up through crude storage draws, product inventory declines, or demand destruction.

HFI Research is a contrarian investment research firm specializing in oil and natural gas markets and publishes detailed supply-demand analysis and trading insights for energy investors.

Even in the event of an immediate ceasefire, the firm said the oil market cannot rebalance quickly due to physical constraints. Around 160 million barrels of oil remain in floating storage, which will take 30 to 40 days to reach shore, followed by another 20 days for tanker turnaround, delaying normalization of supply flows.

At the same time, about 70 very large crude carriers are currently involved in US export flows to Asia, with total cycle times stretching up to three months before they can return to Middle East routes. This extended logistics chain means meaningful tanker traffic through the Strait of Hormuz will not resume for months, even if the route reopens.

The report also highlights that global refinery outages exceed 5 million barrels per day, including about 3 million barrels per day in the Middle East, further tightening supply despite steady end user demand. As a result, global onshore inventories are expected to decline sharply.

HFI estimates that cumulative storage losses linked to the disruption could reach 1.2 billion barrels by the end of April, 1.59 billion barrels by the end of May, and 1.98 billion barrels by the end of June.

In the United States, commercial crude storage is projected to fall below 400 million barrels and approach operational minimum levels of 370 to 380 million barrels by the end of July, signaling a significant tightening in the world’s last major buffer market.

HFI added that even a reopening of the Strait of Hormuz without conditions would not prevent inventory drawdowns, as the time required to normalize tanker flows and clear existing imbalances will continue to pressure supply.

The firm warned that only large scale demand destruction, potentially similar to pandemic era reductions, or direct policy intervention such as export restrictions, could stabilize the market under current conditions.