Global Oil Supplies Hit Record Low as Strait of Hormuz Disrupted Amid West Asian Conflict

Global Oil Supply Shock Triggers Market Volatility

The ongoing conflict in West Asia has triggered the largest oil supply shock in modern history, with the effective closure of the Strait of Hormuz disrupting approximately 20 million barrels per day of oil shipments.

This strategic waterway, one of the world's most critical energy chokepoints, handles a significant portion of global crude shipments, sending shockwaves through energy markets and pushing oil prices sharply higher. The current supply disruption is far larger than previous historic shocks, including:

• Hormuz closure (current crisis): approximately 20 million barrels per day disrupted
• Iranian Revolution (1978): 5.5 million b/d
• Yom Kippur War (1973): 4.5 million b/d
• Iraq's invasion of Kuwait (1990): 4.3 million b/d
• Iran-Iraq War (1980): 4.0 million b/d
• Russian invasion of Ukraine (2022): 2.0 million b/d

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Energy experts note that the current disruption alone is roughly equal to the combined supply losses from the five major crises listed above, highlighting the unprecedented scale of the shock.

Asian Stock Markets Plunge

Asian stock markets slumped sharply on Monday as oil prices surged past $110 per barrel for the first time since 2022, intensifying fears about the economic fallout from the escalating West Asia conflict. The Kospi index in South Korea plummeted more than 8%, triggering its second circuit breaker in four trading sessions and forcing a 20-minute halt in trading at 10:31 a.m. local time. Major technology stocks led the sell-off, with Samsung Electronics dropping more than 10% and chipmaker SK Hynix falling 11.6%.

The Nikkei 225 in Japan also tumbled 6.48%, slipping below the 53,000 level for the first time since early February, while the broader TOPIX index fell 5.8%. Other major decliners included SoftBank Group, which slid more than 11%, and semiconductor-related stocks, with Advantest falling over 10% and Lasertec dropping more than 9%.

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