Rabobank strategists used a partial model of the global oil supply chain to assess the risk of refined product bottlenecks. The model estimates the supply and demand changes needed, rather than forecasting actual inventories.
For a Strait of Hormuz disruption lasting up to three months from March, Europe is unlikely to face physical shortages of oil products. Instead, the main adjustment is expected to come through higher prices.
Short Term Disruption Implications
If the Strait remains closed for around one year, Europe’s buffers would be depleted. This would make demand reduction unavoidable, especially for jet fuel, naphtha and fuel oil.
Effects would vary by sector, with aviation, logistics and air-freight-reliant industries most exposed. Parts of Asia and Oceania would face higher shortage risk due to low stocks, limited refining capacity and reliance on Middle East supplies.
The article was produced using an artificial intelligence tool and reviewed by an editor.
Given the renewed tensions in the Strait of Hormuz, we see a clear risk of a price-driven event in the oil markets over the next few weeks. A short-term closure of the strait, lasting up to three months, would likely not cause physical shortages in Europe but would send prices higher. With Brent crude already pushing past $95 a barrel on the latest news, the market is beginning to price in this possibility.
Positioning For Market Volatility
We should be positioning for increased volatility, as implied volatility on crude options, measured by the OVX index, has already jumped to 45. Buying out-of-the-money call options on crude futures for the next quarter offers a defined-risk way to profit from a potential price spike. This strategy capitalizes on the analysis that a shorter disruption primarily impacts price rather than physical supply.
The refined products market, particularly jet fuel and naphtha, presents a more targeted opportunity. We are seeing record global air travel this year, with jet fuel demand up nearly 8% since 2025, meaning any supply disruption will hit a tight market. Therefore, we should look at bullish positions in heating oil or gasoil futures, as these often move with other middle distillates like jet fuel.
If we believe the disruption could last longer than three months, the strategy shifts to account for physical shortages. A year-long closure would deplete Europe’s buffers, which are already running below the five-year average according to recent Euroilstock data. This scenario makes bearish positions on industries highly dependent on air freight and travel, such as certain tech and logistics companies, an attractive hedge.
Looking back at the tanker attacks in 2019 gives us a partial template, but the market is more fragile now. Back then, a 20% spike in oil prices quickly reversed because global inventories were more robust. After the inventory drawdowns we saw through 2025, the system has less capacity to absorb a prolonged shock, suggesting any price reaction could be more sustained this time.
The analysis also points to greater risk for parts of Asia, which could create arbitrage opportunities. We should monitor the price differential between Brent and Dubai crude benchmarks. A sustained closure of Hormuz would likely cause this spread to widen dramatically, benefiting traders positioned for a relative outperformance of Atlantic basin crude.
