Six million barrels a day go offline as oil shock tests markets and lifts Canada’s edge
Six million barrels of oil per day are offline — “the biggest outage in the history of humanity,” according to Eric Nuttall — and the shock is rippling through prices, policy and energy security debates from the Strait of Hormuz to Canada.
According to BNN Bloomberg, Nuttall, senior portfolio manager at Ninepoint Partners, says the world faces an approximate six million barrel‑a‑day supply shortage because the Strait of Hormuz is closed amid the war in Iran.
He says the closure has trapped about 20 percent of global supply and forced major producers like Saudi Arabia to cut production by an estimated 11m barrels per day.
Emergency reserves have acted as a temporary buffer, but Nuttall warns they are rapidly depleting.
“This is the worst case scenario,” he says. “We’re days away from parts of the world experiencing actual shortages.”
BNN Bloomberg reports that Brent crude has risen to about US$109 a barrel and US West Texas Intermediate (WTI) to roughly US$112.
Nuttall estimates the global economy starts to break once oil reaches about US$177 per barrel, when roughly 5.5 percent of global GDP is spent on oil.
He says prices must rise to “kill demand through higher price” and restore balance.
As this unfolds, political risk is front and centre.
CNBC reports that oil prices edged higher after US President Donald Trump doubled down on threats to attack Iran’s civil infrastructure, warning the nation would be “taken out in one night” if it did not reopen the Strait of Hormuz.
The same outlet says US WTI futures for May traded around US$113.46 per barrel and June Brent around US$110.36 per barrel as of 8:45 pm ET.
Trump repeated that the US would destroy Iran’s power plants and bridges if Tehran did not reopen the waterway by his stated deadline, while also saying Iranian leadership was negotiating “in good faith.”
At the same time, CNBC reports that Reuters has outlined a Pakistani framework to end the five‑week‑old conflict.
Axios reports that Iran rejected a US ceasefire proposal and tabled a 10‑point plan that calls for “a permanent end to hostilities,” a protocol for “safe passage through the Strait of Hormuz,” and the lifting of sanctions and reconstruction.
CNBC notes that chances of a ceasefire before the deadline appear slim.
Flows remain far from normal.
CNBC, citing S&P Global Market Intelligence, reports that eight tankers transited the Strait of Hormuz on Monday, up from fewer than two per day in March but still a fraction of the pre‑war average of 20m barrels per day of crude and products in 2025.
Reuters says the strait — which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates — remains largely closed due to Iranian attacks on shipping after US-Israel attacks began on February 28.
The article reports that some vessels, including an Omani‑operated tanker, a French‑owned container ship and a Japanese‑owned gas carrier, have passed through since Thursday as part of Iran’s policy of allowing ships from countries it deems friendly.
Reuters says Brent settled at US$109.77 a barrel and WTI at US$112.40 in choppy trade on Monday, after WTI jumped 11 percent and Brent 8 percent in the previous session — the biggest absolute price increases since 2020.
Refiners are now seeking alternative crude, particularly from the US and Britain’s North Sea, and Reuters reports that spot premiums for US WTI have jumped to all‑time highs as Asian and European refiners compete.
Reuters also notes that OPEC+ agreed to a modest 206,000 barrel‑per‑day rise for May, while Saudi Arabia set its May Arab Light official selling price to Asia at a record US$19.50 a barrel above the Oman/Dubai average, up US$17 from the previous month.
Russian supply has been disrupted by Ukrainian drone attacks, though Reuters reports that the Ust‑Luga terminal has resumed loadings and exports from the Black Sea port of Tuapse are set to rise.
Nuttall tells BNN Bloomberg that even if the conflict ends and the Strait of Hormuz reopens, shortages will not ease right away.
He says it would take about 30 days for tankers to reach Asia for loading and another 30 days to return to destination ports, a process he argues will draw down global storage “to no levels.”
He says Saudi Aramco’s rerouting covers only about 4m barrels per day of what he calls a roughly 22m barrel‑per‑day problem and describes the situation as “COVID inverted.”
