Commodities
Home›Commodities›Energy›Oil remains near US$100 a barrel despite Strait of Hor…
Oil remains near US$100 a barrel despite Strait of Hormuz disruption
Analysts cited by SCMP Economy say Gulf producers rerouted shipments and used unused pipeline capacity after the Strait of Hormuz was shut, helping keep global supply adequate.
When Iran shut down the Strait of Hormuz at the start of the war, it threatened to choke sea passage for some 15 million barrels of oil a day, raising fears that global prices would spike enough to severely crimp the world economy.
Nearly seven months later, oil is still expensive but not as extreme as many anticipated, with the market described as hovering around US$100 a barrel, a level higher than before the conflict but lower than feared.
SCMP Economy, citing analysts, attributes the resilience to Gulf producers quickly finding alternative routes and drawing on unused pipeline capacity, even as attacks by Iran and allied militants forced more frequent workarounds.
The outlet also notes that oil exporters and the US military adjusted their response in stages, while a US naval blockade and tightened sanctions are described as weighing on Iran’s own economic leverage.