Iranian Parliament officially passes the Strait Toll Law, Middle Eastern exports plummet 71%, and a global oil shortage spreads from Asia.

(Source: Xingyuan Chemical Industry Park Research Institute)

On April 1, international oil prices moved within violent fluctuations while staying at high levels. As of the close on March 31, the price of light sweet crude oil futures for May delivery on the New York Mercantile Exchange closed at $101.35 per barrel, while Brent crude oil futures closed at $103.72 per barrel. During the day, Brent surged to above $116 at one point, then fell back to around $103. The market has been pulled back and forth between “peace talks expectations” and “the reality of a blockade.”

The fighting has entered its 33rd day. Over the past 72 hours, the situation has undergone fundamental changes: on March 31, Iran’s Parliamentary National Security Committee formally passed the Strait Management Plan. It established the role of Iran’s armed forces in overseeing and controlling the Strait, and clearly prohibited vessels from the United States, Israel, and countries that implement unilateral sanctions against Iran from passing through the Strait. This means the institutional shift of the Strait of Hormuz from an “international waterway” to an “Iran-controlled waterway” has entered the legislative process.

Meanwhile, IEA Executive Director Fatih Birol provided a set of shocking figures: the current global daily oil supply shortfall has reached 11 million barrels—exceeding the total supply losses caused by the two crises of the 1973 Arab oil embargo and the 1979 Iranian Islamic Revolution. This is the largest-scale oil supply disruption in modern history.

Today, from an analyst’s perspective, let’s use data to sort out the key changes since the first full month of fighting.

1. Facilities and oilfields destroyed by the U.S. and Iran

Iran: Parliament passes a bill to formally establish the Strait’s control role

On March 31, Iran’s Parliamentary National Security Committee formally passed the Strait Management Plan—by far the heaviest signal of an escalation in the situation. Under the plan, Iran’s armed forces establish their role in controlling the Strait, explicitly prohibiting vessels from the United States, Israel, and countries that implement unilateral sanctions against Iran from passing through the Strait of Hormuz. All vessels transiting the Strait must reach an agreement with Iran, and vessel documents are subject to careful review.

Iran’s Supreme Leader’s foreign affairs adviser, Velayati, warned that any ground invasion of Iran by the enemy in any region would meet with a “historic” failure. Iran’s first vice president, Aref, was even more direct: the U.S. President Trump can only decide to dispatch troops to Khark Island, but whether these personnel can return “will no longer be up to his say.”

On the military front, Iran’s Islamic Revolutionary Guard Corps said it has formulated a long-term plan to continuously weaken Israel and the U.S. military forces in the region. In the 88th wave offensive of Operation “True Promise-4,” Iran struck targets in central, southern, and northern Israel, among other areas. Iran’s air defense forces also claimed that a “hostile” MQ-9 “Reaper” drone was shot down over the Isfahan region.

U.S.-Israel strikes: 70% of Iran’s military-industrial targets

Israel says that its actions together with the U.S. against Iran are “past the halfway point.” In a statement, Israel Defense Forces said Israel’s Air Force would complete strikes on all “key” assets in Iran’s military production industry on April 1. According to the IDF, all key locations used by Iran to develop weapons that threaten Israel (about 70% of Iran’s military production industry) will become strike targets. In the future, other non-key military production facilities may also be listed as potential targets.

In an interview, Israeli Prime Minister Benjamin Netanyahu said that “from the standpoint of completing the mission, we’re past halfway.” U.S.-Israel forces struck “key elements of Iran’s warfighting capabilities,” including missile systems, weapon factories, and personnel related to nuclear projects. Netanyahu said that the current focus is on “their (Iran’s) stockpile of enriched uranium,” and U.S. President Trump has ordered that these materials be moved out of Iran.

Spillover of the conflict: A Kuwaiti oil tanker attacked off the coast of Dubai

On March 31, the Dubai media office in the UAE reported that a Kuwaiti oil tanker moored off the coast of Dubai was attacked and caught fire. Dubai emergency response and firefighting personnel successfully put out the fire. The incident caused no casualties and no crude oil leakage occurred. This event shows that the conflict has spilled over into countries around the Persian Gulf, and the risk exposure of energy supply chains has accordingly expanded.

Earth says: The biggest change over the past three days is that Iran’s parliament has formally passed the Strait management law. This is not a temporary measure—it is an institutional change: U.S. and Israeli vessels are banned from transiting, and all vessels must reach an agreement with Iran. Israel has also said it will take out 70% of Iran’s military industry. After 33 days of fighting, both sides are ratcheting up the pressure, with no one left with an exit.

2. Export quantities of crude oil losses in countries in the Middle East; increases in crude oil exports from other regions globally

Middle East exports plunge: from 25.13 million bpd to 9.71 million bpd

The effective closure of the Strait of Hormuz has pushed Middle East oil exports down to the lowest level in history. According to Kpler, the combined average daily export volumes of crude oil, condensate, and refined products from eight countries—Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Bahrain, and the UAE—have fallen from 25.13 million bpd in February to 9.71 million bpd, a crash of 61%. Another agency, Vortexa, reports even more startling numbers: last week’s export volume dropped to 7.5 million bpd, down 71% from 26.10 million bpd in February.

This is the largest oil supply disruption ever in global history. Before the conflict, the eight countries above together accounted for 36% of total global seaborne oil export volume. As countries’ oil storage facilities move toward saturation, the overall scale of production cuts in the Middle East continues to expand. Analysts estimate that the total reduction in crude oil production in the Middle East is currently already at 7 to 10 million barrels per day.

IEA Executive Director Fatih Birol said plainly that the current global daily oil supply shortfall is 11 million barrels—exceeding the total supply losses caused by the two crises of the 1973 Arab oil embargo and the 1979 Iranian Islamic Revolution.

Production cuts by countries: UAE reduces from 3.4 million bpd by more than half; Iraq’s decline is the worst—production is down 70% compared with before the conflict; as the world’s largest oil exporter, Saudi Arabia has also cut production by about 20%.

Global scramble for oil: Northeast Asia buyers go on a buying spree for U.S. crude

With Middle East oil unable to get out, global buyers have to look for oil everywhere. Buyers in Northeast Asia have bought 60 million barrels of U.S. crude this month, setting a three-year high for a single month. In normal times, Northeast Asia purchases only about 35 million barrels of U.S. crude per month.

On prices, the premiums paid by buyers are astonishing. For a batch of crude sent to Northeast Asia, the premium versus the spot Brent benchmark is as high as $12 to $13 per barrel; for other cargoes, the premium versus the Dubai benchmark is about $18 per barrel, while premiums for similar trades last month were only $5 to $6.

Some grades of crude produced in Norway, Algeria, Libya, and Kazakhstan are already at record-high levels relative to North Sea spot crude. According to data from the Argus Media Group, bidding for Norway’s Johan Sverdrup crude reached $11.30 above the spot Brent, and the premium for U.S. Mars crude was $11.

Oman crude: A bellwether for Asia’s benchmark

Because Oman exports oil from ports outside the Strait of Hormuz and has become one of the few Middle East oil grades that can still load normally, its price becomes a temperature gauge for Asia’s shortage. On March 17, Oman crude surged to nearly $154 per barrel. On March 19, it further broke through $166.96 per barrel, setting a historical record.

Earth says: Middle East exports plunged 71%, meaning 11 to 16 million fewer barrels of oil per day. Northeast Asia buyers went crazy—buying U.S. crude aggressively; 60 million barrels hit a three-year high, and the premium jumped from $5 to $18. Norway’s oil, Algeria’s oil, and Kazakhstan’s oil were all snapped up at record prices. The United States became the biggest winner in this crisis.

3. Global crude oil prices, consumer price changes, and measures taken by countries

Oil price trend: spot and futures are badly disconnected; Oman trades at a $51 premium to Brent

As of March 31, Brent crude settled at $103.72 per barrel and WTI at $101.35 per barrel. But the spot price that truly reflects Asian refinery procurement costs is far more surprising than the futures market—Oman crude at one point broke above $166, and Saudi light crude spot prices were $158.5 to $164.5 per barrel.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, pointed out: “At the moment, it feels like the futures market and the spot market have become disconnected. (This is) the most severe supply disruption since the 1970s, and Brent crude can hardly be sustained above $100.”

Analyst research from Haitong Securities said that Asia’s actual delivered-at prices for oil are significantly higher than the financial market benchmarks, and the divergence between spot and finance is extremely pronounced. Based on a financial oil price of $170 per barrel, after adding freight and insurance, the delivered-at oil price in Asia could reach $181 per barrel. Oman’s oil trades at a premium of as much as $50 per barrel versus Brent; Middle East-to-China VLCC freight rates have risen as high as 517WS, corresponding to about $8 per barrel; war-risk insurance premiums have risen from 0.25% to 1%–1.5%, corresponding to an additional $2.5–3.5 per barrel in insurance cost.

Price changes: from fertilizer to plastics, prices surge across the board

The Strait of Hormuz carries about one-third of global seaborne fertilizer trade. The International Food Policy Research Institute (IFPRI) shows that 30% of global fertilizer is transported through the Strait of Hormuz. Market analysts noted that the Middle East contributes about 35% to 40% of the world’s total urea fertilizer exports, a share even higher than the global crude oil exports from the region. Since the outbreak of the conflict, urea prices have surged by about 35%, with the increase at one point exceeding that of crude oil futures.

Nearly 25% of global exports of polyethylene (PE) and polypropylene (PP) come from the Persian Gulf region. Polymer exports have basically stalled, and in multiple Asian markets, PE and PP prices have risen by more than $200 per ton. Asian ethylene prices have surged 80% to $1,280 per ton.

A Qatar natural gas supply cutoff has doubled global helium prices. As a key material for semiconductor manufacturing, the price increase directly triggers inventory anxiety among South Korean chip companies. Basic chemical feedstocks such as sulfur and naphtha have also jumped in price due to the cutoff, leading downstream chemical plants to cut output and shut down.

Measures taken by various countries to respond

International Energy Agency (IEA): Announces that 32 member countries unanimously agreed to release 400 million barrels of strategic petroleum reserves to address global oil supply tightness. However, 400 million barrels is only enough for 4 days of global consumption—treating the symptoms rather than the root cause.

Japan: Starting March 26, it began releasing 8.5 million kiloliters of crude oil (about 80 million barrels), equivalent to one month of consumption. At the same time, starting April 1, it will temporarily lift the limit on the utilization rate of 50% capacity for inefficient coal power plants for one year, which is expected to reduce liquefied natural gas consumption by about 500k tons per year.

South Korea: If oil prices break through $120, the government may introduce measures to limit people’s use of cars. This would be the first driving limits since the 1991 Gulf War. The South Korean government has raised its resource security crisis alert level from “watch” to “caution.”

Australia: Announced that it will cut fuel consumption tax in half for three months to deal with the situation where gasoline prices hit a 20-year high.

India: Imposes an export duty of 21.5 rupees per liter (about 23 cents) on diesel exports, and an export tax of 29.5 rupees per liter on aviation fuel. It also cuts domestic gasoline and diesel taxes by 10 rupees per liter each.

Vietnam: Major airlines announced a significant reduction in capacity starting in April. Vietnam Airlines will suspend seven domestic routes. In the next quarter, it plans to reduce flights by 10% to 20% per month.

Thailand: A special subsidy fund has a shortfall of about 38 billion baht, and the fiscal limit is nearing.

Poland: Announced it will reduce fuel value-added tax from 23% to 8%, and cut the fuel consumption tax to the minimum level required by EU regulations.

Philippines: Requires that, except for emergency services, civil servants work four days per week to address energy shortages.

Earth says: IEA releases 400 million barrels—just enough for the world to drink for four days. South Korea is preparing for limited driving for the first time in 30 years. Japan releases a month’s reserve. Australia cuts taxes. India adds export taxes. Vietnam cuts flights. Thailand burns through the subsidy fund. Wood Mackenzie warns that Vietnam’s subsidy fund will be drained at the beginning of April; Thailand is already in deficit, and many countries in Asia are approaching their fiscal limits.

4. Forecasts: effects on the world if the fighting lasts for 2 months or becomes long-term

Based on early April data, an initial target price increase to $125 for April by Société Générale is not an emotional outburst, but a hard floor calculated from supply-chain costs.

1. Short term (next 1–3 months): assessment of spot frictions

Baseline scenario (probability 55%–60%): Red Sea high-risk effectively insulated

Forecast: Brent holds solid at $115–$135 per barrel; WTI is in the $102–$120 per barrel range.

Logic: The war won’t keep worsening, but it also won’t stop. Extra voyage days over half a month and high premiums are set in stone. Long-term buyers are forced to lock in supply in the spot market at high premiums, and $125 becomes the market’s fair central pivot.

High-risk scenario (probability 25%–30%): War substantially spreads to core areas

Forecast: Brent rises unilaterally to $135–$150 per barrel.

Logic: If stray munitions hit third-party deep-water berth facilities, mainstream shipowners’ mutual protection associations would issue a comprehensive Middle East navigation ban, and the shipping market would face an absolute shock.

Extreme tail scenario (probability 10%–15%): A hard physical decoupling in both directions between two key throats

Forecast: Brent breaks through the extreme range to $160–$180 per barrel.

Logic: The two major shipping routes are hard-blocked due to sunken ships or mines. The world will immediately see a 20% collapse in real physical crude supply, causing an energy disaster of the century.

2. Medium to long term (next 1–3 years): macro price anchoring

Baseline scenario (probability 45%–50%): High-cost long-cycle lock-in

Forecast: The annualized average Brent anchor remains centered at $105–$125 per barrel.

Logic: Existing oil-producing facilities are battered, and the world can only barely sustain a broken logistics network. Getting above $100 is no longer a positive stimulus; it becomes a passive acceptance of ongoing friction in the long-axis supply chain.

Fragile cooling scenario (probability 30%–35%): Reaching an off-market compromise

Forecast: Brent slowly drifts down to $95–$110 per barrel.

Logic: Even if all sides forcibly stop fire, a loss of trust and damage to infrastructure mean the risk premium is extremely difficult to unwind. The moderate $80 oil price before the war has become a thing of the past.

Worsening scenario (probability 15%–20%): Lockdowns alternate as the new normal

Forecast: Brent’s bottom is lifted to $125, with frequent intermittent breaches of $150 per barrel.

5. Summary

Let’s go through the core data from the first full month of fighting:

First, Iran’s parliament officially passed the Strait management plan. It bans U.S.-Israeli ships, and all vessels must reach an agreement with Iran. This is a fundamental shift from “war measures” to “institutional change.”

Second, the U.S. and Israel say their actions against Iran are “past the halfway point.” Israel’s Air Force will complete strikes on 70% of Iran’s military production industry, with a focus on enriched uranium stockpiles.

Third, Middle East exports have collapsed 71%. The eight countries’ average daily exports fell from 25.13 million bpd in February to 7.5–9.71 million bpd. Daily losses amount to 11 to 16 million barrels of supply. The IEA says this is “the largest-scale supply disruption in global oil markets in history.”

Fourth, the global oil scramble: the U.S. becomes the biggest winner. Northeast Asia buyers aggressively bought 60 million barrels of U.S. crude, a three-year high; premiums jumped from $5 to $18. Oman’s premium versus Brent once reached $51.

Fifth, Asian ethylene surges 80% to $1,280 per ton. South Korea’s YNCC permanently shuts down two cracking units, reducing ethylene capacity by 60%; Japan’s six ethylene plants cut production, accounting for 64% of the country’s total capacity.

Sixth, emergency responses by countries continue, but fiscal limits are pressing closer. South Korea is preparing for limited driving for the first time in 30 years; Japan releases a month’s reserve; Vietnam’s subsidy fund will be drained at the start of April; and Thailand is already in deficit.

Seventh, the consequences of the fighting remain severe. Société Générale predicts April Brent averages $125 and peaks at $150. UN data: a one-month loss of $186 billion GDP, 3.7 million unemployed, and 4 million people pushed into poverty. The OECD expects global GDP growth to fall to 2.9% and inflation to rise to 4.0%. Goldman Sachs warns that if capacity is damaged, oil prices may remain above $100 for the next two years.

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