Five months of mostly closed Strait of Hormuz have not sent oil prices spiking to $150 or $200 per barrel, as many ******* ysts had warned in March.
Even as more than 10% of global crude oil supply suddenly disappeared from the market, oil didn't hit record high levels. Crude oil prices haven't even stayed permanently above $100 per barrel.
Three key drivers have kept oil prices from surging to never-before-seen highs. First, governments started tapping strategic reserves, including as part of the IEA-coordinated 400-million-barrel stocks release, to offset the 1 billion barrels of crude that never made it out of the Gulf in the first three months of the conflict. Next, Asia slashed consumption with fuel-saving measures and reduced refinery throughput.
Crash in China's Crude Imports Kept Prices Capped
Arguably, the biggest cushion the market has had was China's crude oil import behavior. The world's largest crude oil importer had amassed an estimated up to 1.4 billion barrels of crude in commercial and strategic stockpiles before the Iran war. The huge cushion allowed it to slash imports when the Strait of Hormuz closed, and prices spiked.
#first
Even as more than 10% of global crude oil supply suddenly disappeared from the market, oil didn't hit record high levels. Crude oil prices haven't even stayed permanently above $100 per barrel.
Three key drivers have kept oil prices from surging to never-before-seen highs. First, governments started tapping strategic reserves, including as part of the IEA-coordinated 400-million-barrel stocks release, to offset the 1 billion barrels of crude that never made it out of the Gulf in the first three months of the conflict. Next, Asia slashed consumption with fuel-saving measures and reduced refinery throughput.
Crash in China's Crude Imports Kept Prices Capped
Arguably, the biggest cushion the market has had was China's crude oil import behavior. The world's largest crude oil importer had amassed an estimated up to 1.4 billion barrels of crude in commercial and strategic stockpiles before the Iran war. The huge cushion allowed it to slash imports when the Strait of Hormuz closed, and prices spiked.
#first
3 months ago
