Oil shipments through the Strait of Hormuz had begun to recover rapidly following a preliminary agreement between the U.S. and Iran, reaching about 60% of pre-war levels. This boost pushed oil prices down and initiated early postwar economic recovery. However, a recent collapse of a cease-fire and renewed fighting between U.S. and Iranian forces has caused significant declines in oil flow, with estimates dropping from 5 million barrels to as low as 3 million barrels per day. As a result, oil prices surged, with Brent crude rising over 8% to above $84 a barrel.
Goldman Sachs analysts suggest that recovering oil flow will take longer than anticipated due to these conflicts, requiring potentially greater demand reductions and inventory withdrawals. The situation has made shipping routes less secure, impacting global oil supply and pricing dynamics. China, the world’s largest oil importer, may adjust its import strategies depending on future price changes and stockpile assessments amidst the ongoing tensions.
Source link
