Strait flows are back to 80%, but oil prices haven’t collapsed
Crude oil flows through the Strait of Hormuz are reportedly back to around 80% of pre-war levels, with one estimate putting daily transit at 10.3 million barrels. Yet oil prices haven’t moved lower as that logic would suggest.
What the market may be repricing is the buffer. The CEO of Saudi Aramco said global commercial inventories had fallen to less than 6 billion barrels, after more than 1 billion barrels were released to make up the shortfall. The strait’s flow has recovered, but inventories haven’t.
Meanwhile, the IEA’s governing board is set to finalize arrangements for the G7’s emergency reserve release. If inventories are really tight, why release more reserves?
Is this a way to insure against supply disruptions—or a sign that few options remain? These claims have yet to be verified.
Crude oil flows through the Strait of Hormuz are reportedly back to around 80% of pre-war levels, with one estimate putting daily transit at 10.3 million barrels. Yet oil prices haven’t moved lower as that logic would suggest.
What the market may be repricing is the buffer. The CEO of Saudi Aramco said global commercial inventories had fallen to less than 6 billion barrels, after more than 1 billion barrels were released to make up the shortfall. The strait’s flow has recovered, but inventories haven’t.
Meanwhile, the IEA’s governing board is set to finalize arrangements for the G7’s emergency reserve release. If inventories are really tight, why release more reserves?
Is this a way to insure against supply disruptions—or a sign that few options remain? These claims have yet to be verified.