📖 🇮🇷🛢 Hormuz is the largest energy supply shock on record, says McKinsey

At its peak, the Strait of Hormuz disruption took 14% of global oil and gas supply off the market.

That is more than double the 1970s oil shocks in relative terms, and more than six times the peak impact of Russia’s 2022 invasion of Ukraine.

Before the crisis, 91% of the energy flowing through Hormuz was oil and 9% was gas.

The system has held up better than that scale suggests.

3 buffers absorbed the shock, and none of them existed at this scale in 1973:

Strategic stocks: the IEA coordinated a release in March, with the US alone pledging 172M barrels.

Bypass pipelines: Saudi Arabia’s East-West line to the Red Sea and the UAE’s line to Fujairah.

Flexible trade: cargoes rerouted and refiners switched crude grades and suppliers.

Those buffers are being used up.

The US SPR is at its lowest since 1982.

China drew a record 47–57M barrels from storage in September.

The East-West pipeline was hit in September, and October brought the most ship attacks of the war.

A buffer protects you only once.
The question for 2027 is whether stocks get rebuilt before the next disruption.

Source: McKinsey Global Institute

📎 Jack Prandelli