A dire warning from the physical oil market is flashing red for global finance, with the price of ready-to-ship crude hitting a record $144 per barrel—a staggering 10% premium over futures that signals a far worse supply crunch than traders have priced in. The collapse of traffic through the critical Strait of Hormuz has created a historic gap between paper contracts and physical reality, prompting experts to sound the alarm on imminent economic turbulence as Brent futures lag at just $96.51.

Strait of Hormuz transit falls to a trickle

Approximately one-fifth of the world’s oil and liquefied natural gas shipments typically pass through the Strait of Hormuz, a narrow canal that links the Persian Gulf to the larger ocean.

The strait handled between 120 and 140 vessel transits every day prior to the start of attacks on February 28. That number has fallen dramatically.

According to shipping intelligence firms Kpler and Lloyd’s List Intelligence, only five vessels crossed on Wednesday and seven on Thursday.

More than 600 ships, including 325 tankers, are currently stranded in the Gulf. Even if a ceasefire holds, analysts expect the strait to handle no more than 10 to 15 safe passages per day.

Tensions between the United States and Iran are adding to the uncertainty. Iran has insisted that all vessels passing through must coordinate with its naval forces.

President Donald Trump has said Iran is not holding up its end of the “safe passage” agreement reached in the ceasefire, while Iranian Foreign Minister Abbas Araghchi has countered that the U.S. is the one failing to honor the deal. Further talks aimed at reaching a permanent ceasefire are scheduled to take place in Islamabad.

Countries move to secure alternative supply lines

Faced with an unstable spot market, countries are moving quickly to lock in alternative supply arrangements.

Singapore and Australia said Friday they are working toward a formal, legally binding agreement on energy and critical supplies.

Singapore Prime Minister Lawrence Wong and Australian Prime Minister Anthony Albanese agreed to speed up negotiations covering those sectors.

The two nations have a close energy relationship. Australia supplies more than one-third of Singapore’s LNG, while Singapore provides 26% of Australia’s refined fuel imports.

According to Wong, in order to better control risk and explore longer-term supply agreements, Singapore has combined its gas purchases under a single organization.

Japan is also taking measures to reduce the pressure.

Plans to release more oil from national reserves in May of next year, roughly 20 days’ worth of domestic consumption, were revealed by Prime Minister Sanae Takaichi. Last month, a comparable release was made.

Additionally, Japan is attempting to get oil via routes that completely avoid the Strait of Hormuz. The nation has enough oil on hand to last 230 days as of April 6, with government stocks alone providing 143 days.

Shipping industry leaders still don’t believe the situation will improve soon, even though U.S. Vice President JD Vance says the strait could slowly reopen.

Janiv Shah from Rystad Energy warned that tanker prices will likely stay high and oil supply will remain limited for a while. He added that even if countries make progress in talks, it doesn’t always lead to real, on-the-ground improvements.

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