Global Economy — 2026-04-05

Oil Surpasses $112 Per Barrel as Hormuz Blockade Traps 20 Million Barrels of Daily Supply

Brent crude surged past $112 per barrel as Iran's full blockade of the Strait of Hormuz traps approximately 20 million barrels of daily oil production, nearly 20% of global consumption, inside the Persian Gulf. WTI has nearly doubled in 2026. The Dallas Fed projects a 90-day closure would cause a 2.9% quarterly GDP decline. The IEA coordinated a record release of 400 million barrels from emergency stockpiles. US gasoline prices climbed to $4.10/gallon, up 37% since strikes began February 28. At $170/barrel scenarios, analysts project stagflationary shock sufficient to reshape the US midterm election calculus.

Analysis
The Dallas Fed's 2.9% quarterly GDP decline projection assumes a 90-day closure. The war is already at day 36 with no diplomatic off-ramp. At current burn rates, the IEA's 400M barrel strategic reserve release covers approximately four months of the deficit. After that, there is no cushion.

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