Oilfield services leader Baker Hughes and the Federal Bank of Dallas anticipate that traffic in the Strait of Hormuz (SoH) will normalize by the latter half of 2026. Conversely, the International Energy Agency (IEA) projects that flow through the SoH will gradually resume starting in May 2026.
Since hostilities between the US and Israel against Iran escalated on February 28, 2026, traffic through the 34 km-long Strait of Hormuz, a critical energy chokepoint, has nearly come to a standstill. This situation is now regarded as the most significant disruption in the global oil and gas markets to date.
According to the Dallas Fed’s Q1 2026 Energy Survey, 39% of oil and gas companies surveyed expect normal traffic in the SoH by August 2026. An additional 26% foresee normalization by November 2026, while 14% expect it to take even longer. The data gathered from April 15–20 involved 120 respondents, including 78 exploration and production firms and 42 oilfield services companies.
The survey also revealed that a majority of executives foresee future disruptions in the SoH. Specifically, 48% believe that geopolitical events are “very likely” to disrupt traffic again within the next five years, while 38% view such an occurrence as “somewhat likely.”
Baker Hughes, in its Q2 2026 and FY2026 guidance, noted that “Middle East disruptions continue through the end of June, without further escalation,” and projected that the conflict will be resolved by the end of Q2 2026, with the Strait of Hormuz fully operational during the second half of 2026.
The IEA outlined three scenarios concerning the resumption of traffic through the SoH. In its “base case,” the agency expects oil shipments to gradually resume in May 2026, enabling recovery in both oil production and refinery activities throughout Q3 2026. This scenario indicates that oil market deficits could revert to a surplus averaging 2.5 million barrels per day (mb/d) in the latter half of 2026.
In contrast, the “protracted case” suggests that disruptions in Middle Eastern energy production and trade will remain significant, limiting energy flows to international markets. This may lead to sustained deficits in the oil balance, resulting in increased prices and a considerable year-on-year contraction in oil demand.
Moreover, this scenario could reduce demand by an average of 5 mb/d from Q2 2026 through Q4 2026, resulting in a consequential shortfall that could elevate global stock calls to untenable levels, with nearly 2 billion barrels potentially lost by year-end.
With the geopolitical landscape continuing to evolve and the likelihood of a negotiated settlement unclear, the IEA acknowledges that their two scenarios encompass a range of probable outcomes. They also note the possibility of a middle case where flows see a gradual but partial resumption before the end of 2026.
The IEA’s April oil market report indicated that global oil supply fell by 10.1 mb/d to 97 mb/d in March. Ongoing attacks on energy infrastructure in the Middle East and restrictions on tanker movements through the SoH have led to unprecedented disruptions in oil supply.
Published on April 26, 2026.
