Dan Yergin said the Strait of Hormuz closure is draining inventories fast, tightening global oil supply, and could keep crude elevated until a deal restores flows. He expects prices to fall quickly on a deal announcement, but says a full normalization would take months rather than days.
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CNBC interviews S&P Global vice chairman Dan Yergin about the oil market impact of the Strait of Hormuz remaining closed. Yergin argues that inventories that had been cushioning the market are being drawn down, and says the scale of disruption is severe: he cites traffic falling from about 135 ships per day in May to nine ships per day, which he says represents about 1.2 billion barrels of oil lost so far. He says the key issue is not just the immediate price move, but how long the crisis lasts, because Iran is strengthening its control over the strait through what he describes as a new 'Persian Gulf Strait Authority' that imposes paperwork and tolls on ships, with proceeds he says going to the IRGC. On price outlook, Yergin pushes back on the idea that oil should already be at $200 and says existing inventories and alternative supplies matter. …
Near term, the setup is bullish crude as long as Hormuz traffic stays constrained, with the main tactical risk being any surprise deal headline that forces a fast repricing lower.
Over the next few months, the market likely stays tight until real tanker flows and inventories recover; a settlement would relieve prices quickly, but the physical normalization could lag by months.
Structurally, the clip argues that chokepoint control is a lasting oil-market risk premium: even without a production collapse, maritime security and insurance can materially reshape energy pricing and trade.
Inventories that had been cushioning oil prices are being drained out.
He says this is the key factor keeping prices from going even higher.
Traffic through the Strait of Hormuz has collapsed from about 135 ships a day to nine ships a day.
He uses this as evidence of the severity of the closure.
The disruption has effectively removed about 1.2 billion barrels of oil so far.
He translates the reduced ship flow into a cumulative oil-loss estimate.
How are current oil inventories and Strait of Hormuz disruptions affecting prices, and how quickly could a deal change that?
He says inventories are being drained, which is the key reason prices are elevated. He adds that if a deal is announced and oil starts flowing again, prices would come down fairly quickly, but the overall system would still take months to normalize.
Are gas stations gouging consumers as prices rise?
He says no; in his view, station prices are reflecting market forces. He attributes higher gasoline prices to stronger demand on the system and the fact that product is being exported, with U.S. exports offsetting some lost barrels.
What is the current toll or tax to send a ship through the Strait of Hormuz?
He says the quoted number appears to be about $2 million. He adds that the exact fee may vary by country or relationship, but the process requires submitting paperwork to the IRGC for approval.
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