Oil market impact of Strait of Hormuz closure (with Jonathan Ferro, Lisa Abramowicz, Amarie Hordern)

Rakae Ibrahim argues that while inventories are currently buffering the oil market, prolonged closure of the Strait of Hormuz will deplete these buffers, leading to higher oil prices. Iraq, Kuwait, and Bahrain are most exposed, while Saudi Arabia and UAE have pipeline bypass capacity. Fertilizer disruptions also threaten agricultural prices.

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BCA Research 1.0
Industry Research Firm
Rakae Ibrahim 8.0

Oil market impact of Strait of Hormuz closure (with Jonathan Ferro, Lisa Abramowicz, Amarie Hordern)

metals

Fertilizer disruption and agricultural price increases may spill over into broader commodity inflation, including metals used in agriculture and energy infrastructure.

wti

The path of least resistance for oil prices will be higher.

2 calls

+23

more right than wrong, with meaningful gains

2/13/2026 4:51:47 PM	short term cautious up	7 days later	+4.05%	+2.02%

yields

Higher oil prices from prolonged Strait closure could add to inflationary pressures, potentially pushing yields higher in the near term.

Crude rising as US and Iran remain at stalemate. If Strait is not reopened, prices will increase. Why might we be closer to that moment?

Jonathan Ferro
Rakae Ibrahim

Massive inventories are shielding the oil market temporarily, but as the Strait remains closed, inventories will draw down and the buffer is removed. The path of least resistance for oil prices will be higher.

We've seen a stable oil market due to US exports surging and China cutting imports, but these buffers will wear thin.
Who blinks first—US pressuring Iran or Iran waiting out inventory drawdowns?

Jonathan Ferro
Rakae Ibrahim

Iran has proved resilient in pain threshold. I would not count on them blinking. The oil market will eventually bear the brunt.
Which Gulf countries are most exposed financially to prolonged conflict?

Lisa Abramowicz
Rakae Ibrahim

Iraq is most exposed—inventories filled first, production shut down. Kuwait and Bahrain also shut down production. Saudi Arabia and UAE have pipeline bypass capacity (East-West pipeline, Port of Fujairah).
Are there similar offsets for other commodities like cooking oil?

Lisa Abramowicz
Rakae Ibrahim

Yes, fertilizer disruption is a byproduct of energy sector disruption, translating to upside pressure on agricultural commodities. Closure of Qatar Energy's Ras Laffan plant also disrupts fertilizer. Insufficient fertilizer during planting and harvest season poses massive upside risk to agricultural prices.

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