Analysts at JPMorgan said if the Strait of Hormuz remains closed, oil supplies from Iraq and Kuwait could begin to be cut off within days, potentially cutting production by 3.3 million barrels per day (bpd) by the eighth day of the Middle East conflict.
The bank said on March 3 that Iraq and Kuwait have about three and 14 days, respectively, before they are forced to halt oil exports through the strait.
The Strait of Hormuz is a narrow and strategically important waterway between the Persian Gulf and the Gulf of Oman, and is one of the key choke points for global oil transportation, through which approximately one-fifth of the world’s oil and liquefied natural gas flows flow.
If the shutdown is prolonged, losses could widen to 3.8 million barrels per day by the 15th day and 4.7 million barrels per day by the 18th day, JPMorgan said.
Two Iraqi oil officials told Reuters that Iraq would be forced to cut production by more than 3 million barrels a day over the next few days if tankers could no longer freely pass through the Strait of Hormuz and reach their loading ports.
US President Donald Trump has said the US Navy could begin escorting tankers through the Strait of Hormuz if necessary.
Iranian media reported that a senior Islamic Revolutionary Guard Corps official said the Strait of Hormuz was closed and Iran would open fire on ships attempting to pass.
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