If Hormuz Closes Again, the World's Oil Reserves May Last Only a Month or Two: Emergency Stocks at Multidecade Lows
If the United States-Iran war resumes in full and the Strait of Hormuz is shut again, the world's emergency oil reserves may last only one to two months, analysts have warned. Strategic stockpiles built up over decades have already been drawn down heavily since the war began and now sit at their lowest levels in decades.
The warning comes as attacks on tankers in and around the Strait of Hormuz mount and efforts to end the United States-Israel war on Iran remain deadlocked. Oil prices have climbed towards their highest levels in five months. Brent crude, the international benchmark, rose by more than $2 to $110.85 a barrel on Wednesday, close to a five-month peak.
A day earlier, Iran's Islamic Revolutionary Guard Corps (IRGC) said two tankers were set ablaze after hitting mines at what it called an illegal crossing point in the strait. Then, on Thursday, the IRGC said it hit seven more tankers, although Washington dismissed the claim. In a statement, the IRGC said four of the vessels were transferring oil when they were targeted and caught fire overnight.
The escalation has spread to another critical waterway. In September, the Houthis — the armed group also known as Ansar Allah — seized territory in Yemen close to the Bab al-Mandeb strait, a critical chokepoint into and out of the Red Sea and a gateway to Egypt's Suez Canal. In other words, two of the world's main oil transit routes are now under threat at the same time.
Strategic oil reserves are stockpiles of crude oil and fuel held by governments, or by companies on their behalf, for use in a supply emergency. The International Energy Agency (IEA), established in 1974 after the Arab oil embargo, coordinates most of them. Its importing members must hold at least 90 days of net imports. China and India are not members.
On March 11, days after the war began on February 28, the IEA's 32 members agreed to make 400 million barrels available from emergency supplies — more than double the volume released after Russia's full-scale invasion of Ukraine in 2022. According to IEA figures, the US pledged 172.2 million barrels from its Strategic Petroleum Reserve (SPR) and Japan pledged 79.8 million barrels.
The cost of that release is now clear. The SPR has since fallen to 283 million barrels, its lowest level since October 1982, according to the US Department of Energy. Much of that oil was lent rather than sold and must be returned with extra barrels, according to the US Energy Information Administration — so not all of what appears on paper is actually usable.
Aaron Kildow, a senior crude oil analyst at Sparta Commodities, said global strategic stocks excluding China and Iran have fallen by nearly 327 million barrels since the end of December 2025, with the US, Europe and Japan accounting for about 95 percent of the draw. He estimated that leaves only about 400 million barrels of usable reserves worldwide, excluding China's stockpile, which is unlikely to be exported, and Gulf stocks, which could be cut off by a total closure of Hormuz. Nearly half of these available stocks are in Japan. Europe has about 76 million barrels uncommitted, but members such as Germany are holding some back for a local emergency. "Europe is the real wildcard, both on timing and willingness," Kildow said.
China's position is comparatively comfortable. Muyu Xu, a senior crude oil analyst at the analytics firm Kpler, said China's onshore crude stocks stand at 1.13 billion barrels, down from 1.23 billion in late February but still enough for about 80 days of refinery intake. India's reserves, by contrast, cover just eight days of its imports, according to Reuters — among the thinnest buffers of any major importer.
Before the war, about one-fifth of the world's oil and liquefied natural gas supplies, or roughly 20 million barrels of oil a day, passed through the Strait of Hormuz. Saudi Arabia has increased the amount of crude it transports from its oilfields in the east to its Red Sea port of Yanbu in the west via the East-West Pipeline, thereby bypassing Hormuz. But there have been strikes on that pipeline, and tankers heading south from Yanbu must pass through Bab al-Mandeb, where the Iran-backed Houthis declared a blockade on Saudi shipping in July. Only a confirmed 373,000 barrels a day of Saudi crude have transited Bab al-Mandeb so far this month, the lowest level since February, Xu said, with most Yanbu cargoes now heading north via Egypt instead.
If Hormuz were shut and the Houthis blocked all Saudi tankers, Gulf producers could export only through a few pipelines and Yanbu's northbound route, Xu said. That would leave about 7.5 million barrels a day of Middle Eastern crude, against 16.8 million now — a shortfall of about 9.3 million barrels a day. She also warned that strikes on oilfields, terminals and pipelines could make the supply disruption "even more severe and prolonged."
The question is how long reserves could cover that gap. The experts' answer: not for long — possibly just weeks. If Kpler's estimated shortfall had to be covered entirely from the roughly 400 million usable barrels Kildow identified, they could not, in practice, be released that fast. Japanese and South Korean reserves can move quickly, Kildow said, but US barrels are staged over three months, and Europe's contribution is uncertain.
Chris Beauchamp, chief market analyst at IG Group, said the world was fortunate after the first closure. "The salient feature of March and beyond was how a crisis didn't actually develop. We got away with it," he said. But he warned: "I don't think the global economy will be as lucky next time if there is a protracted conflict. A month or two is all we have."
The world would not literally run out of oil. Instead, prices would rise until enough demand disappeared. "One hundred fifty dollars [per barrel] becomes a very distinct possibility, which then sees significant demand destruction," Beauchamp said. The sharpest squeeze would be on diesel, which is already nearly double the price of crude, the IEA said. Refiners would compete for crude grades rich in diesel — "a cost that ultimately lands on consumers," Kildow said.
Nor would the squeeze hit uniformly. Most Gulf exports in September and October went to Asian buyers, and India and Pakistan are among the most exposed, Kildow said, adding that their nearest alternative supply, from West Africa, is 25 to 28 days away by sea, compared with two days from Fujairah in the United Arab Emirates. "The squeeze won't hit uniformly. It lands fastest and hardest where reserves are thinnest and substitute supply is farthest away," Kildow said.
There is a flip side to the crisis: a profit bonanza. In the second quarter of this year, as the US-Iran war was under way, ExxonMobil reported earnings of $14.5bn, its highest in four years, while Chevron posted $12bn, its best in six years, and Shell more than doubled its earnings to nearly $10bn — profits largely down to high oil prices. In August, US President Donald Trump said companies such as ExxonMobil and Chevron were "making too much money based on a shortage." Xu said a second shock would send refiners scrambling for supplies from the US, Latin America, West Africa and Russia, allowing non-Middle Eastern producers to benefit from higher crude prices. With reserve tanks nearly empty, the warning is now the biggest worry not just for the energy market, but for consumers and economies around the world.
