Global oil supply has dropped by up to 11 million barrels per day due to the ongoing war in the Middle East [1].
This shortage threatens to destabilize energy costs worldwide as the closure of the Strait of Hormuz restricts the flow of crude to international markets. The resulting supply shock is forcing major refiners to pay steep premiums to secure necessary feedstock.
Some refiners, including Reliance, are paying a premium of $30 to $40 per barrel [4] to maintain operations. This cost increase reflects the desperation of buyers in a tightening physical market where spot and futures prices continue to climb.
"We are weeks away from oil rationing as prices rise," Eric Nuttall said in a BNN Bloomberg report [2].
However, data from the U.S. presents a different picture of the current energy landscape. U.S. crude inventories increased by 6.2 million barrels during the week ending March 13, 2026 [3]. Additionally, U.S. oil exports reached a record high of 12.7 million barrels of crude in a single week [5].
Despite these domestic surpluses in the U.S., the global market remains volatile. The disparity between record U.S. exports and the physical shortages reported in other regions suggests a fragmented global distribution system. While the U.S. maintains ample supply, the disruption of Middle Eastern exports creates a deficit that cannot be easily filled by other producers.
"Global oil supply has been cut by up to 11 million barrels per day due to the Middle East war," the Oilprice.com analysis team said [1].
“"We are weeks away from oil rationing as prices rise."”
The contradiction between record U.S. production and a global physical shortage highlights a critical vulnerability in energy logistics. Even with high U.S. output, the closure of the Strait of Hormuz removes a volume of oil that the rest of the world cannot immediately replace, leading to localized rationing and extreme price premiums for refiners.
