By the numbers: West Asia war caused a bigger oil disruption than the Gulf War, 1973 oil shock

The disruption to global oil supplies caused by the West Asia war has surpassed some of the biggest energy crises in modern history, including the 1973 oil shock, the Iran-Iraq war, the Iranian Revolution and the Gulf War, according to a new International Monetary Fund (IMF) blog. While crude oil prices initially surged following the conflict, the global economy avoided a much sharper spike because of higher oil production outside the Gulf, weaker demand and the use of strategic inventories.

However, the IMF blog warns that these buffers are rapidly shrinking, leaving the world more vulnerable if another major supply disruption occurs.

Biggest oil market disruption in decades

According to the IMF, the conflict effectively closed the Strait of Hormuz, disrupting around 20 million barrels per day (mbpd) of crude oil and refined products—equivalent to nearly 20% of global oil consumption.

Although Gulf producers managed to reroute part of their exports through alternative infrastructure, including Saudi Arabia's pipeline to the Red Sea port of Yanbu and the UAE's Fujairah port outside the Strait of Hormuz, these alternative routes compensated for only a small share of the lost oil flows.

By the end of May, the global oil market had lost access to more than 1.1 billion barrels of crude, equivalent to around 10 days of normal global consumption.

The IMF's historical comparison shows that the cumulative supply disruption at the same stage exceeded the oil supply losses recorded during the 1973 oil embargo, the Iran-Iraq war, the Iranian Revolution, the Gulf War, and even Russia's invasion of Ukraine. Among the disruptions compared in the IMF chart, only the ongoing West Asia war produced such a steep and prolonged supply shortfall.

Why prices remained below worst-case forecasts

Despite the unprecedented disruption, crude prices largely stabilised in the $90-$100 per barrel range instead of climbing to levels many analysts had feared.

The IMF attributes this resilience to three key "shock absorbers."

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Before the conflict began, global oil production already exceeded demand by roughly 2 million barrels per day, providing an initial cushion.

The first shock absorber was lower demand, particularly in Asia, where higher fuel prices encouraged industries and power producers to reduce oil consumption or switch to alternatives such as coal and renewable energy.

The second was higher production outside the Gulf. Oil output increased by almost 2 million barrels per day above 2025 levels, led by the United States, while Venezuela, Guyana and Russia also contributed additional supply.

The third factor was the large-scale use of commercial and strategic oil inventories. According to the IMF blog, an estimated 4.1 million barrels per day market deficit during March-May was largely offset through inventory drawdowns, including commercial stockpiles in China and strategic petroleum reserves.

Warning for policymakers

The IMF cautions that the global oil market's ability to absorb shocks has weakened significantly. Spare production capacity has been deployed, inventories have declined and demand has already adjusted, leaving fewer options if another geopolitical crisis disrupts supplies.

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Even if the Strait of Hormuz is fully reopened, industry estimates cited in the IMF blog suggest it could take two to three months before a substantial share of oil exports returns to normal as shipping schedules, insurance availability and tanker operations gradually recover.

The IMF says the episode offers three key lessons for policymakers: rebuild depleted oil inventories, diversify both energy sources and export routes to reduce dependence on critical chokepoints, and ensure consumer support measures remain targeted and temporary. Without restoring these buffers, the world could enter its next energy shock from a far weaker position than it did during the current West Asia crisis.

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