Only one oil tanker has passed! The Strait of Hormuz is nearly "cut off," and Middle Eastern oil-producing countries have already begun reducing production.

The oil passage through the Strait of Hormuz is on the brink of paralysis. According to the latest tracking data from Morgan Stanley, on March 3rd, only one oil tanker passed through this critical global energy chokepoint, a drop of over 95% from normal levels. Iraq has been forced to cut production, Asian refineries are beginning to reduce processing loads, and the global energy market is experiencing severe shocks from this rare disruption.

According to Chasing Wind Trading Platform, Morgan Stanley’s daily tracking report (Issue 2) on the Strait of Hormuz released on March 3rd shows that by the evening of that day, only one oil tanker had completed transit, compared to two on Monday. Normally, about 35 crude oil, refined product, and LNG ships pass through daily.

Meanwhile, Iraq is reported to have cut approximately 1.2 million barrels per day of production due to its reserves falling to critical levels. Previously, Morgan Stanley’s latest estimates revealed that if the strait were fully blocked, the storage capacity of the seven major Middle Eastern oil-producing countries could only support 25 days, after which they would be forced to cease production entirely.

Price reactions in the energy markets have been swift and intense. The European natural gas benchmark TTF price has risen over 65% in the past two trading days, returning above €50 per MWh; the crack spread for global diesel and fuel oil has widened significantly; and freight rates for oil tankers from the US to China jumped from $79 per ton on Monday to $100 per ton. The impact of this supply disruption has spread from the Middle East to global commodity markets, heightening investor concerns over the stability of the energy supply chain.

Transit volume plummets, new loadings drop to zero

Morgan Stanley’s tracking data reveals an almost shutdown scenario. The report states that at the time of writing, no crude oil, LPG, or LNG tankers are transiting the Strait of Hormuz.

Looking at loading data, the situation is equally severe — the chart shows that recent crude oil loadings from oil-producing regions behind the Strait of Hormuz destined for major importers have fallen to zero, while ships already en route are still arriving, creating a stark contrast.

Infrastructure damage also shows new signs of deterioration. Reports indicate that the Abu Dhabi port storage facilities and Musaffah fuel terminal have been attacked by drones, and the Port of Duqm in Oman has also been affected. These strikes directly threaten the Gulf region’s storage and transportation capacity, further fueling market fears of ongoing supply disruptions.

Refineries reduce loads, freight and gas prices soar

The supply-side shock has quickly propagated downstream. According to Argus, Asian refiners are actively reducing processing volumes due to crude shortages, with a Singapore refinery’s utilization rate dropping from 85% to 60%. This adjustment means a decline in refined product output, directly pressuring fuel supplies in Asia.

Freight markets are reacting strongly as well. Morgan Stanley data shows that even on routes outside the Middle East, freight rates continued to rise on Tuesday, with the US-to-China route seeing a single-day increase of over 26%.

In terms of natural gas, the TTF price has surged 65% over two days, mainly concentrated in near-month contracts, indicating that the market currently views this disruption as a short-term shock. However, there is no clear expectation of a quick resolution. Morgan Stanley states it will continue to publish daily tracking reports this week to monitor this unusual supply interruption.

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