The Strait of Hormuz Has Been Closed for 100 Days. Why Aren’t Oil Prices Higher?
WIRED • • business
Key Points:
- President Donald Trump claimed a secret US mission moved 100 million barrels of oil through the blockaded Strait of Hormuz, but the exact volume of oil passing through remains uncertain due to covert shipping practices known as the "dark trade."
- Despite a 95% reduction in crude oil shipments from Arabian Gulf ports and a 99% drop in liquefied natural gas carriers, Brent crude prices have remained relatively low at $87.55 per barrel due to strategic reserves and supply from other countries like China, the US, Brazil, and Canada.
- Analysts note that global oil storage buffers are being drawn down and approaching critical levels, warning that if the Strait of Hormuz remains closed beyond July, the market could face significant supply challenges.
- The oil market has adapted by cutting demand and utilizing stockpiles, but the US may need to prioritize domestic production by the end of the year, especially as winter heating demand approaches.
- Global oil supply saw a sharp decline in March, with OPEC+ production down by 9.4 million barrels per day, and uncertainty remains about the timing and scale of production recovery.