We've lost about 1.2 billion barrels of oil so far from Hormuz closure: S&P Global's Dan Yergin

Summary

Dan Yergin, S&P Global Vice Chairman, analyzes the impact of the Strait of Hormuz closure on oil markets. He highlights that approximately 1.2 billion barrels have been lost from supply, inventories are draining, and summer demand will push prices higher. He notes that a potential deal could lower prices but cleanup would take months, and the physical market already shows tightness.

• Strait of Hormuz closure has removed about 1.2 billion barrels of oil supply.
• Inventories are being drained, preventing prices from skyrocketing so far.
• Summer driving and air travel seasons will increase global fuel demand.
• Physical cargo prices are rising faster than futures, indicating real shortage.
• Iran has set up a toll system for ships, creating additional friction.
• A potential deal could bring prices down to the 60s-80s, but recovery would take six months.
• U.S. oil exports have helped partly offset the supply loss.
• No immediate resolution is expected, keeping upward pressure on oil.