Hormuz oil flows rose from about 12% to about 15%, but the global supply gap remains significant

Overview

This report is a brief note from JPMorgan's global commodities team on oil flows through the Strait of Hormuz. The core view is that the strait has not been fully closed; some traffic continues through Iranian exports, pre-approved cargoes, and selective permissions, but overall flows remain far below pre-war levels. In March, oil flow was about 12% of normal levels, and in April it recovered to about 15%, indicating a marginal improvement in supply, but not enough to change the fact that global crude and refined-product markets remain materially tight.

Core views

The report's core views are threefold: first, Hormuz is not a single oil transport corridor; it also carries LNG, refined products, petrochemical feedstocks, aluminum, containers, dry bulk, and agricultural trade, so controlled passage affects a wider range than crude alone. Second, the move from 12% to 15% in April represents marginal recovery rather than full normalization; global crude exports remain about 9 mbd below pre-war levels, and refined-product exports about 4 mbd lower. Third, Iran may be turning controlled passage from a tactical pressure tool into a strategic objective, and without a comprehensive ceasefire agreement with the United States, the incentive to fully restore free passage is limited.

Analysis framework

The report mainly uses actual shipping-flow and export-tracking frameworks, combining AIS signals, vessel transit paths, tanker counts, 4-week averages of crude and refined-product exports, and country-specific approved-transit cases to assess the true passage status of the Strait of Hormuz and the global energy supply gap.

Methodology notes

• Shipping flow trackingAIS and vessel transit monitoring

  Assess actual transit conditions through the Strait of Hormuz using AIS signals and vessel routes.

  The report distinguishes headline-level closure from actual physical flows, arguing that improved AIS signals and approved vessels rerouting around Larak Island together explain the rebound in April.

• Commodity supply-demand analysis4-week average tracking of crude and refined-product exports

  Use 4WA export volumes to measure the supply gap relative to pre-war levels.

  Current 4-week average global crude exports are about 9 mbd below pre-war levels, and refined-product exports are about 4 mbd lower, showing that even after rerouting, market balance has not materially improved.

• Geopolitical scenario analysisControlled passage and strategic leverage assessment

  Assess whether Iran has an incentive to fully reopen the strait and whether future passage will be conditional.

  The report argues that Iran can use control over traffic to raise global energy costs and pressure opponents while allowing selective passage that serves its economic and strategic interests.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Crude oil

  Directly related

  Strengths

  Supply constraints and the export gap may support an oil-price risk premium.

  Weaknesses

  Oil flow has already recovered from 12% to 15%, indicating some moderation in the extreme supply-cutoff risk.

  Comparison

  Compared with a full-closure scenario, the current state is a middle ground of low flow, selective passage, and controlled recovery.

  Risks

  If passage does not continue to improve, the supply gap may persist; if a comprehensive ceasefire or reopening occurs, the risk premium could ease.

• Refined products

  Directly related

  Strengths

  Exports are about 4 mbd below pre-war levels, showing that the refined-products market is also tight.

  Weaknesses

  The report does not provide inventory or crack-spread data by product category.

  Comparison

  Like crude, refined-product exports have not recovered materially despite rerouting.

  Risks

  Refinery feedstock supply, shipping restrictions, and regional demand swings could amplify price volatility.

• LNG and maritime trade

  Indirectly related

  Strengths

  Hormuz carries LNG and other commercial vessels, so controlled passage could raise transport risk premiums.

  Weaknesses

  The report remains focused on oil flow and provides limited quantitative LNG data.

  Comparison

  LNG, containers, and dry bulk are affected by corridor risk rather than the oil-flow gap that is the report's main focus.

  Risks

  If new routes or permit mechanisms prove unstable, non-oil maritime trade could also be disrupted.

Key data

• March total transit through Hormuzabout 5% of pre-war levelsThe report says that even at the peak of the disruption, some traffic continued to pass through.
• March oil flow through Hormuzat least 18 tankers, about 12% of normal flowSome ships from countries such as India and Pakistan were granted passage.
• April total flow through Hormuzabout 10% of pre-war levelsReflects improved AIS signals and a larger number of approved vessels.
• April oil flow through Hormuzabout 15% of pre-war levelsThe 12% → 15% in the title refers to this marginal recovery in oil flow.
• Global crude export gapabout 9 mbd below pre-war levelsBased on the current 4-week average tracking.
• Global refined-product export gapabout 4 mbd below pre-war levelsRefined-product exports are also under significant pressure.
• Total market flow gapabout 14 mbd below pre-war levelsThe report believes external substitute supply is limited and market balance has not materially improved.

Impact & implications

For investors and commodity markets, the recovery of Hormuz oil flow from 12% to 15% reduces the most extreme narrative of a complete cutoff, but it does not eliminate supply shortages or the geopolitical risk premium. If passage remains controlled, fee-based, and conditional, global energy costs could stay elevated, and crude, refined products, and LNG-related assets will remain driven by a combination of supply risk, shipping routes, and policy-negotiation progress.

Risks

• The Strait of Hormuz remains controlled, preventing oil flow from recovering further beyond 15%.
• Iran formalizes and prolongs traffic control, maintaining its strategic leverage through fees or conditional permits.
• The United States and Iran fail to reach a comprehensive ceasefire agreement, delaying a full reopening of the strait.
• Improved AIS signals may add noise to short-term flow observations, while the sustainability of actual passage capacity still needs to be validated.
• Insufficient external substitute supply keeps the global crude and refined-product export gaps supportive of energy-price volatility.

What to watch

• Whether Hormuz oil flow continues to recover from about 15% or slips back toward March levels.
• Changes in the number, nationality, and cargo type of approved vessels.
• Whether transit around Larak Island and new routes along the Omani coast are used more widely.
• Whether talks involving the United States, Iran, and Oman lead to a more stable transit arrangement.
• Whether the global crude export 4WA gap of about 9 mbd versus pre-war levels narrows.
• Whether the refined-product export gap of about 4 mbd versus pre-war levels improves.
• Whether the market views controlled passage as a temporary tactical measure or a long-term structural risk.