Why does Morgan Stanley describe the current oil market situation as a 'race against time' regarding the Strait of Hormuz?

Morgan Stanley describes the oil market as being in 'a race against time' because the factors that have so far restrained price increases — including existing market buffers, expectations of the Strait of Hormuz reopening, higher US crude exports, and slowing Chinese imports — may no longer hold if the strait remains closed into June; a prolonged closure beyond what China or the US can sustain 'could cause renewed tightness,' especially as the US's ability to maintain elevated export levels 'appears under more pressure.'

What specific supply-demand dynamics has Morgan Stanley identified as shielding the global oil market from severe disruption despite the Hormuz blockade?

Morgan Stanley states that 'the United States’ 3.8 million barrel-a-day increase in exports and China’s 5.5 million barrel-a-day cut in imports have shielded the rest of the world from 9.3 million barrel-a-day of tightness — a very significant amount,' and notes that the market entered the crisis with buffers while investors kept expecting the strait to reopen, helping futures avoid topping 2022 peaks despite the loss of almost 1 billion barrels.

Oil Market in 'Race Against Time' on Hormuz, Morgan Stanley Says

May 10, 2026

Morgan Stanley warns that if the Strait of Hormuz remains closed beyond June, oil prices may surge despite current buffers from increased US exports and decreased Chinese imports.

bloomberg

2026-05-10

Oil Market in 'Race Against Time' on Hormuz, Morgan Stanley Says

2026-06-29

Morgan Stanley Warns of Global Oil Glut, Cuts Outlook on Hormuz

2026-07-03

Morgan Stanley Downgrades Oil Price Forecast Again

2026-09-08

Morgan Stanley Says War-Weary Oil Traders Shun Long-Term Bets

Oil Market in 'Race Against Time' on Hormuz, Morgan Stanley Says

FAQ