Overview
- Late February strikes and escalation effectively closed the Strait of Hormuz, removing more than 10 million barrels per day of Gulf seaborne supply and creating the largest modern shock to oil flows.
- The United States has surged exports and begun a large SPR drawdown — part of a pledged 172 million‑barrel U.S. contribution to a roughly 400 million‑barrel IEA release — that has sent combined U.S. commercial and emergency stocks to their lowest combined level in more than two decades.
- China slashed crude imports in May by nearly 40 percent versus last year’s average, and that demand drop has been a major factor keeping prices below $100 despite the supply loss.
- OPEC+ approved a fourth consecutive quota rise of 188,000 barrels per day for July, but officials and analysts say the increase will have limited impact because much Middle East output and shipping remain physically shut in.
- Analysts warn that the current balance rests on temporary cushions — higher U.S. shipments, reserve releases and weak Chinese demand — and that thinning inventories leave consumers and fuel markets exposed to sudden price spikes if flows through Hormuz do not resume.