The control of the Strait of Hormuz by Iran has sidelined nearly 19 Mb/d. A decision that is paralyzing oil shipping routes. It leaves operators in an unprecedented crisis management situation. Argus Media’s analysis of this crisis redefines the fundamentals of maritime supply chain resilience.
The Strait of Hormuz carries about 19 million barrels per day (Mb/d) of crude oil and refined products. Its control has paralyzed Iraqi exports from Basra, 3.4 Mb/d, Iranian exports from the Kharg Island (1.6 Mb/d), and a large portion of Emirati and Kuwaiti flows. Asian refiners, who rely on the Gulf for most of their supply, are now without their usual sources. The situation described in Argus Media’s report leaves no doubt about the current state of affairs.
A single point of failure risk
This shock reveals a well-known structural vulnerability for logisticians. They have concentrated their flows on a single passageway. In terms of port risk management, this is the materialization of a single point of failure risk on a global scale. To address the crisis, as Argus Media points out, they are turning to alternative routes. However, the pressure on these infrastructures with limited capacities is leading to new congestion.
Iranian strikes on Yanbu
Thus, the Saudi East-West oil pipeline (Petroline, 7 Mb/d) to Yanbu on the Red Sea serves as the main security valve. It has a capacity of 2.6 Mb/d. With the conflict, it is now operating above its nominal capacity with around 4.8 Mb/d. However, this infrastructure has now become a target. Indeed, the Samref refinery in Yanbu (400,000 b/d) was hit by Iranian strikes on March 18 and 19. Meanwhile, the Fujairah port perfectly illustrates the fragility of bypass solutions. Located outside the strait, on the Gulf of Oman, it is considered a strategic and secure hub. Nevertheless, it is only 140 km from the Iranian coast. This situation exposes it to drone strikes. Its loading capacities have dwindled from 1.94 Mb/d to less than 1.2 Mb/d in three weeks. Argus Media projects that its bunkering volumes could drop to a tenth of its March levels, according to Argus data. The port normally handles an average of between 500,000 and 550,000 tons of bunkering per month.
Asian refiners’ response: urgent diversification of supplies
Asian buyers have embarked on a race to diversify their sources of supply. American WTI (comprising a blend of Texas light oil) has become the main safe haven. Japan has secured over 530,000 b/d for delivery in June, doubling its previous import record from the United States. ExxonMobil Singapore is redirecting its Jurong refinery (592,000 b/d) towards this product after years of absence. Thailand has also returned to this market. This marks a reversal as the country had been absent since 2018. Meanwhile, production restrictions are increasing. Formosa Petrochemical (Taiwan) has reduced margins by 60% at its Mailiao refinery. Japanese refining rates saw their largest weekly decline since May 2024. These operational adjustments reflect an unforgiving logistics reality: the substitution of a 14 Mb/d flow cannot be assured quickly or without massive additional costs.
The geographical challenge of the international response
The emergency release of 426 Mb by IEA members faces a logistical geography barrier. Indeed, 28 of the 32 IEA members are located in the Atlantic basin. Surpluses of east-west freight routes are constrained by high freight rates. Without destination clauses for this release mechanism, directing these barrels to Asia requires more diplomacy than logistics. This crisis serves as a case study for any maritime logistics professional. It starkly reminds us that the resilience of a supply corridor is not only measured by its nominal capacity, but by its resilience to geopolitical shocks. It highlights the real availability of alternative routes and the ability of substitute ports to quickly increase their capacity. Planning for the continuity of port operations in a context of increasing geopolitical risks is no longer an option. It has become a strategic necessity.
