What did Fed's Lorie Logan say about the potential impact of a prolonged closure of the Strait of Hormuz on global oil and natural gas consumption?

Logan stated that 'if shipping through the strait does not soon return to prewar levels, world oil and natural gas consumption could need to fall more meaningfully than it has so far,' due to highly constrained supplies, and emphasized that 'if the molecules aren’t available, the world can’t consume them.'

According to Logan, what is the current gap between global oil supply reduction and U.S. oil output growth expectations, and how is the shortfall being addressed?

Since the start of the Iran war, global oil supply has fallen by about 13 million barrels a day, while U.S. oil executives expect U.S. output to rise by only 250,000 barrels a day this year and 500,000 barrels a day next year; this shortfall is currently being offset by drawing down finite global inventories.

Fed's Logan: World May Need to Cut Oil and Natural Gas Use

May 27, 2026

Dallas Fed President Lorie Logan warned that global oil and natural gas consumption may need to decrease significantly if shipping through the Strait of Hormuz remains disrupted. Rising energy and fertilizer prices coupled with finite inventories could force meaningful cuts in consumption.

reuters

2026-05-27

Fed's Logan: World May Need to Cut Oil and Natural Gas Use

2026-09-30

Shale Executives Say Iran War Is Sowing Chaos in Oil Markets

Fed's Logan: World May Need to Cut Oil and Natural Gas Use

FAQ