US sees Iran war oil disruption into 2027

US projections now anticipate that oil supply disruptions stemming from the US-Iran war will average about 600,000 barrels per day through the end of next year. These disruptions are tied mainly to constraints on shipments through key maritime chokepoints and the impact of conflict-related production shut-ins across the Middle East.

The outlook is based on the latest Short-Term Energy Outlook from the US Energy Information Administration, which incorporates recent shipping patterns and production data. Under current assumptions, most affected production and trade flows are expected to take until early 2027 to return to pre-war levels.

Crude flows through the Strait of Hormuz have fallen markedly since before the US and Israel launched attacks on Iran. Oil transported through the waterway averaged 4.9 million barrels per day in the second quarter of this year, compared with 21.6 million barrels per day in the last quarter of 2025.

Real-time assessment of flows remains difficult. Some vessels switch off tracking systems, creating gaps in available data and leading to discrepancies among market estimates. Despite these challenges, recent indications suggest that about 9 million barrels per day exited the strait on average over the past week, reflecting some partial recovery from the second-quarter average.

Conflict-related production shut-ins in the Middle East remain elevated but have shown some easing. Shut-in volumes averaged about 5.5 million barrels per day in July, down from 7.5 million barrels per day in June.

However, the EIA expects shut-ins to rise again to an average of 6.6 million barrels per day in the third quarter. This projection assumes that recent threats to vessels carrying Saudi Arabian crude through the Bab el-Mandeb Strait do not result in additional production shut-ins.

Despite attacks on vessels, a key shuttle system that moves oil involving transits through the Strait of Hormuz continues to operate. A number of ships have conducted transfers outside the strait, allowing some barrels to keep flowing even as direct passage remains risky.

Diplomatic efforts to restore normal traffic through the Strait of Hormuz have stalled. Since a mid-June interim truce collapsed, Iranian forces have resumed attacks on vessels, while the US has reinstated a blockade of Iranian ports. On August 8, Iranian officials issued expansive demands for reopening the strait, and the US responded with its own conditions, leaving the future of Hormuz as the central obstacle to a negotiated end to the conflict and a rapid normalization of oil flows.