The oil passage in the Strait of Hormuz is on the brink of paralysis. According to the latest tracking data from Morgan Stanley, only one oil tanker passed through this globally crucial energy chokepoint on March 3, a drop of over 95% from normal levels. Iraq has been forced to cut production, and Asian refiners are beginning to reduce processing loads, as the global energy market is experiencing severe shocks from this rare disruption.
According to the Wind Trading Desk, Morgan Stanley's daily tracking report on the Strait of Hormuz (second issue) released on March 3 shows that as of the evening of that day in UK time, only one oil tanker had completed transit, compared to two on Monday. Normally, about 35 oil, refined oil, and liquefied natural gas vessels pass through daily.
Meanwhile, Iraq is reported to have cut production by about 1.2 million barrels per day due to its inventory falling to critical levels. Previously, JP Morgan's latest estimates revealed that if the strait were completely blocked, the storage capacity of the seven major oil-producing countries in the Middle East could only support 25 days, after which they would be forced to halt production entirely.
The price reactions in the energy market have been swift and severe. The European natural gas benchmark TTF price has risen over 65% in the past two trading days, returning above €50 per megawatt-hour; the global diesel and fuel oil crack spreads have widened significantly; and the freight rates for tankers on the route from the U.S. to China jumped from $79 per ton on Monday to $100 per ton. The impact of this supply disruption has spread from the Middle East to the global commodity market, making investors highly vigilant about the stability of the energy supply chain.
<h2>Transit Volume Plummets, New Loadings Drop to Zero</h2>
Morgan Stanley's tracking data reveals a near-stalled situation. The report states that at the time of writing, no crude oil, liquefied petroleum gas, or liquefied natural gas tankers are passing through the Strait of Hormuz.
From the loading data, the situation is equally grim—comparison charts show that the new loading volume of crude oil from the oil-producing regions behind the Strait of Hormuz to major importing countries has dropped to zero, while vessels already en route continue to arrive at ports, creating a stark contrast.
New signs of damage have also emerged at the infrastructure level. Reports indicate that oil storage facilities at Fujairah Port in the UAE and the Musaffah fuel terminal have been attacked by drones, and Oman’s Duqm Port has also been affected. These strikes directly threaten the storage and transportation capacity in the Gulf region, further exacerbating market concerns about the continued disruption of supply.
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<h2>Refineries Reduce Load, Freight and Gas Prices Soar</h2>
The shock on the supply side has quickly transmitted downstream. According to Argus, Asian refiners are proactively reducing processing volumes due to a shortage of crude oil sources, with one refinery in Singapore seeing its operating rate drop from 85% to 60%. This adjustment means that refined oil output will shrink accordingly, putting direct pressure on fuel supply in the Asian region.
The freight market's response has also been dramatic. Morgan Stanley data shows that even on routes outside the Middle East, freight rates further climbed on Tuesday, with the freight rate from the U.S. to China increasing by over 26% in a single day
In terms of natural gas prices, TTF has seen a cumulative increase of 65% over the past two days, with price movements primarily concentrated on near-month contracts, indicating that the market currently characterizes this disruption as a short-term impact. However, there is no clear expectation in the market regarding whether the situation can be resolved quickly. Morgan Stanley stated that it will continue to release daily tracking reports this week to address this unusual supply disruption

Morgan Stanley tracking data shows that on March 3rd, only 1 oil tanker passed through the Strait of Hormuz, a drop of over 95% compared to normal levels; Iraq was forced to cut production by 1.2 million barrels per day, and Asian refineries significantly reduced their operating rates. This disruption is sending shockwaves throughout the global energy supply chain

- The Strait of Hormuz is facing a severe disruption in oil flow, with only one tanker transiting on March 3, a drop of over 95% from normal levels.  
- Iraq has cut production by approximately 1.2 million barrels per day due to critical inventory levels, causing significant impacts on global energy markets, including substantial price increases in natural gas and shipping rates.  
- The ongoing supply chain concerns highlight the fragility of energy supplies, with Asian refiners reducing processing rates as the disruptions extend beyond the Middle East.

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Only 1 tanker passed! The Strait of Hormuz is nearly "cut off," and oil-producing countries in the Middle East have begun to cut production