Risk warnings have been issued across the board, and the normal supply of crude oil in the Gulf may be permanently over.
2026-05-22 11:25:24
Geopolitical conflicts continue to disrupt shipping routes in the Persian Gulf, and industry leaders predict that the disruption to crude oil exports will continue for a long time. However, market participants still regard the crisis as a short-term logistical problem.
The shipping patterns, transportation systems, and trade logic have undergone fundamental changes. The original stable supply model no longer exists, the energy market will enter a long period of turbulence, security premiums will rise across the board, and the overall trading pattern will be irreversibly reshaped.
Sultan Ahmed Al Jaber, CEO of the UAE National Oil Company and a highly influential industry decision-maker in the Gulf region, publicly predicted that the disruption to Persian Gulf oil shipments will continue until at least mid-2027 .
This warning did not receive enough attention from traders, shipping companies, and financial capital. The market generally believed that the Strait of Hormuz incident could be resolved quickly, and had overly high expectations for waterway clearing, escort and protection, and diplomatic mediation. Industry analysis views were clearly out of sync with the actual geopolitical situation.
Currently, oil price pricing still relies on an ideal scenario of a rapid improvement in the situation. The market generally anticipates that with the resumption of navigation in the Taiwan Strait and the return of insurance costs to normal, Gulf oil-producing countries can quickly restore production and freight volumes to pre-crisis levels. Such unrealistic expectations not only undermine market confidence but also create significant hidden dangers for the global energy supply chain.
Even though some shipping lanes remain open, the current state of infrastructure construction, such as pipeline renovations and security upgrades, is enough to prove that the Gulf crude oil export system has undergone fundamental changes, and supply constraints will become the long-term norm.
For decades, the global economy has been highly dependent on the Hormuz Sea route, a vital maritime energy route. The smooth passage of massive crude oil shipments has been regarded by the market as a stable and unchanging established pattern, which has also created low-cost insurance and a stable trading environment.
The Hormuz crisis that erupted in 2026 completely shattered conventional thinking about global crude oil trade. The Gulf region has transformed from a stable export base into a zone rife with geopolitical risks, with voyages facing multiple threats including military attacks, cyber interference, and waterway disruptions. These multiple risks directly impact crude oil and liquefied natural gas trade, making it difficult to maintain the industry's original operational order.
Military threats have prevented most shipping companies from fully deploying their capacity, leading to frequent issues of ship detours and delays. The actual number of available vessels has drastically decreased, and the true capacity gap far exceeds statistical export figures. The market generally overlooks deeper supply risks; crude oil supply depends not only on extraction output, but also on transportation, insurance, cash flow, and refining and distribution – all are indispensable.
Financial scholar Emir J. Phillips stated that crude oil that cannot be properly circulated, insured, delivered, or transported to refineries cannot be considered effective supply. With the two-tier trading system gradually taking shape, multiple restrictions on shipping, security, and capital have significantly weakened the role of idle production capacity by oil-producing countries in regulating prices. After the crisis, oil-producing countries will find it difficult to stabilize oil prices by increasing production.
The UAE has invested heavily in building bypass facilities to avoid the risks of a single shipping route, but alternative routes also face problems such as congestion, attack threats, and rising insurance premiums. The risk of geopolitical division has spread to the entire Gulf shipping area, putting enormous pressure on the entire export structure.
The current market continues to price based on pre-crisis market logic, clinging to the outdated notion that increased production capacity can stabilize the market and viewing supply disruptions as temporary disturbances. However, the reality is that the Gulf region has entered a period of prolonged instability, with insufficient infrastructure reserves and increased freight rate volatility becoming the norm.
Geopolitics and energy trading are now deeply intertwined, and industry evaluation criteria are gradually shifting from cost-first to security-first. Market confidence continues to suffer, buyers are diversifying their sourcing channels, trading institutions are increasing their hedging allocations, and insurance funds are shrinking their business scope, leading to a gradual divergence in the entire crude oil market.
The reopening of shipping lanes does not equate to a return to normal operations; Gulf energy transportation remains under intense pressure and operates like a wartime crisis. Rebuilding supply confidence requires not only unblocking shipping lanes but also improving supporting infrastructure such as network security and diversified storage pipelines. A full recovery is unlikely in the short term. The market's anticipated rapid recovery is unlikely to materialize, and the long-term high-risk operation of the energy market is now a foregone conclusion.
In summary, the market underestimated the far-reaching impact of the Gulf crisis, marking the complete end of the traditional energy supply model. Shipping routes, transportation conditions, and trading sentiment have all undergone irreversible changes, with various transaction costs now incurred along with security risk premiums. Geopolitical tensions continue to dictate oil price trends. A return to stable supply levels is unlikely in the short term, and global crude oil trade, the refining industry, and even overall inflation will be subject to the long-term and ongoing impact of the Gulf crisis.
The shipping patterns, transportation systems, and trade logic have undergone fundamental changes. The original stable supply model no longer exists, the energy market will enter a long period of turbulence, security premiums will rise across the board, and the overall trading pattern will be irreversibly reshaped.
Market perceptions are detached from reality, and crisis assessments are seriously flawed.
Sultan Ahmed Al Jaber, CEO of the UAE National Oil Company and a highly influential industry decision-maker in the Gulf region, publicly predicted that the disruption to Persian Gulf oil shipments will continue until at least mid-2027 .
This warning did not receive enough attention from traders, shipping companies, and financial capital. The market generally believed that the Strait of Hormuz incident could be resolved quickly, and had overly high expectations for waterway clearing, escort and protection, and diplomatic mediation. Industry analysis views were clearly out of sync with the actual geopolitical situation.
Currently, oil price pricing still relies on an ideal scenario of a rapid improvement in the situation. The market generally anticipates that with the resumption of navigation in the Taiwan Strait and the return of insurance costs to normal, Gulf oil-producing countries can quickly restore production and freight volumes to pre-crisis levels. Such unrealistic expectations not only undermine market confidence but also create significant hidden dangers for the global energy supply chain.
The shipping system has undergone a complete transformation, and the traditional supply logic no longer holds true.
Even though some shipping lanes remain open, the current state of infrastructure construction, such as pipeline renovations and security upgrades, is enough to prove that the Gulf crude oil export system has undergone fundamental changes, and supply constraints will become the long-term norm.
For decades, the global economy has been highly dependent on the Hormuz Sea route, a vital maritime energy route. The smooth passage of massive crude oil shipments has been regarded by the market as a stable and unchanging established pattern, which has also created low-cost insurance and a stable trading environment.
The Hormuz crisis that erupted in 2026 completely shattered conventional thinking about global crude oil trade. The Gulf region has transformed from a stable export base into a zone rife with geopolitical risks, with voyages facing multiple threats including military attacks, cyber interference, and waterway disruptions. These multiple risks directly impact crude oil and liquefied natural gas trade, making it difficult to maintain the industry's original operational order.
Multiple constraints combined have led to a significant reduction in effective crude oil supply.
Military threats have prevented most shipping companies from fully deploying their capacity, leading to frequent issues of ship detours and delays. The actual number of available vessels has drastically decreased, and the true capacity gap far exceeds statistical export figures. The market generally overlooks deeper supply risks; crude oil supply depends not only on extraction output, but also on transportation, insurance, cash flow, and refining and distribution – all are indispensable.
Financial scholar Emir J. Phillips stated that crude oil that cannot be properly circulated, insured, delivered, or transported to refineries cannot be considered effective supply. With the two-tier trading system gradually taking shape, multiple restrictions on shipping, security, and capital have significantly weakened the role of idle production capacity by oil-producing countries in regulating prices. After the crisis, oil-producing countries will find it difficult to stabilize oil prices by increasing production.
The UAE has invested heavily in building bypass facilities to avoid the risks of a single shipping route, but alternative routes also face problems such as congestion, attack threats, and rising insurance premiums. The risk of geopolitical division has spread to the entire Gulf shipping area, putting enormous pressure on the entire export structure.
A shift in market sentiment has ushered in a new cycle for energy trading.
The current market continues to price based on pre-crisis market logic, clinging to the outdated notion that increased production capacity can stabilize the market and viewing supply disruptions as temporary disturbances. However, the reality is that the Gulf region has entered a period of prolonged instability, with insufficient infrastructure reserves and increased freight rate volatility becoming the norm.
Geopolitics and energy trading are now deeply intertwined, and industry evaluation criteria are gradually shifting from cost-first to security-first. Market confidence continues to suffer, buyers are diversifying their sourcing channels, trading institutions are increasing their hedging allocations, and insurance funds are shrinking their business scope, leading to a gradual divergence in the entire crude oil market.
The reopening of shipping lanes does not equate to a return to normal operations; Gulf energy transportation remains under intense pressure and operates like a wartime crisis. Rebuilding supply confidence requires not only unblocking shipping lanes but also improving supporting infrastructure such as network security and diversified storage pipelines. A full recovery is unlikely in the short term. The market's anticipated rapid recovery is unlikely to materialize, and the long-term high-risk operation of the energy market is now a foregone conclusion.
Summarize
In summary, the market underestimated the far-reaching impact of the Gulf crisis, marking the complete end of the traditional energy supply model. Shipping routes, transportation conditions, and trading sentiment have all undergone irreversible changes, with various transaction costs now incurred along with security risk premiums. Geopolitical tensions continue to dictate oil price trends. A return to stable supply levels is unlikely in the short term, and global crude oil trade, the refining industry, and even overall inflation will be subject to the long-term and ongoing impact of the Gulf crisis.
- Risk Warning and Disclaimer
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