Overview
- The Strait of Hormuz has been effectively closed since late February, removing more than 10 million barrels per day of Middle Eastern supply and forcing Gulf exporters to reroute shipments.
- OPEC+ approved a fourth consecutive monthly quota increase of 188,000 barrels per day for July, but actual deliverable output has plunged and many members remain unable to ship normal volumes.
- Coordinated measures including about 172 million barrels pledged from the U.S. Strategic Petroleum Reserve, a sharp drop in Chinese imports and higher U.S. crude exports have kept Brent and WTI below $100 a barrel.
- U.S. crude inventories and global stockpiles have fallen rapidly to multi‑decade lows, thinning the buffer that has so far prevented the worst price scenarios.
- The market faces dual risks: a further tightening if those buffers are exhausted while the Strait remains closed, or rapid oversupply down the line if Gulf flows and extra barrels return before demand normalizes.