Despite the closure of the Strait of Hormuz and the escalation of the US–Israeli war against Iran, oil prices did not reach the forecasted $200 per barrel. Since the start of the conflict on February 28, Brent rose to a peak of about $119 in late March, but then fell below $90 during lulls, averaging around $100. Light Arab crude temporarily exceeded $140. This movement shows that the market absorbed the shock rather than exploding in a sharp surge.
From the outset there were alarming forecasts: Rory Johnston, founder of the Commodity Context bulletin, warned that a prolonged closure of the strait could push prices above $200. Wood Mackenzie experts told The Wall Street Journal that $200 by 2026 was not out of the question, and JP Morgan reports cited a possible $150–200 range in the event of a severe supply deficit. These warnings kept the market on edge, despite the relative decline in quotations.
One of the main restraining factors was the use of strategic reserves. The International Energy Agency announced the release of about 400 million barrels to calm markets and offset part of the lost supply. Major countries also played a key role: China, whose reserves are estimated at 1.2–1.4 billion barrels, and Japan, which released 80 million barrels to support economic stability. These interventions created a temporary safety buffer that softened the blow in the first weeks of the war.
Additional support came from alternative supplies. The US partially eased sanctions, allowing the purchase of already-loaded Russian oil, and Iran continued to export via a “shadow fleet” despite the naval blockade. According to Reuters, about 10.7 million barrels of Iranian crude passed through the Strait of Hormuz from April 13 to 21. Bypass routes also played a role — for example, Saudi Arabia’s East–West pipeline and the Kirkuk–Ceyhan line — which reduced the impact of a full closure of the strait.
On the demand side there was “demand destruction” due to canceled flights and a slowdown in economic activity. Analyst Amr al-Shubki noted that breaking the $130 mark was a turning point, and that the $150 level would lead to a serious contraction in consumption. Meanwhile, Nawar al-Saadi pointed out that the market oscillated between caution and calm: every time prices exceeded $110, calming signals followed that brought prices back to $90. This shows how expectations and policy shape market dynamics.
In the end, the market absorbed the shock thanks to a combination of measures: reserve releases, additional supplies from Russia and Iran, alternative export routes, temporary demand decline, and political interventions. However, experts warn that this balance is fragile — a prolonged war will deplete inventories and gradually push prices up, possibly to $150. As Mohammed Ramadan emphasized, such high levels are not even advantageous for exporters because they spur the development of alternatives, and al-Shubki added that the world will need long-term excess capacity, since expensive oil could persist for two to three years.
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Why is the closure of the Strait of Hormuz considered such a significant event for the global oil market, and how much oil normally passes through it? — The Strait of Hormuz is a strategic “narrow passage” between the Persian Gulf and the open ocean. About 20–21 million barrels of oil and petroleum products pass through it daily, which is roughly 21% of global oil consumption. Closure of the strait would instantly deprive the global market of a huge volume of supply, causing a sharp spike in prices, supply-chain disruptions and panic among importing countries (especially in Asia), since alternative routes cannot quickly make up that volume.
What is Iran’s “shadow fleet” and how does it manage to keep exporting oil despite the naval blockade? — The “shadow fleet” is a network of old, poorly insured tankers, often with AIS transponders switched off, that hide their location and ownership through complex chains of shell companies. Iran uses these vessels for ship-to-ship transfers in international waters, flag changes and forged documentation to circumvent sanctions and maritime patrols. This allows it to export an estimated 1–1.5 million barrels per day, far below pre-war official figures but enough to support the economy.
What alternative export routes exist in the region besides the Strait of Hormuz, and how capable are they of compensating for its closure? — Major alternatives include the Kirkuk–Ceyhan pipeline (Iraq–Turkey) with capacity up to 1.5 million barrels per day, the Petroline (Saudi Arabia–Red Sea) with capacity around 5 million barrels, as well as routes via the UAE and from Oman. However, their combined capacity is significantly lower than the volumes transiting the Strait of Hormuz. Pipelines are often subject to technical failures, sabotage or political disputes. Moreover, they cannot compensate for the loss of 20 million barrels/day, making a complete closure catastrophic for global supplies.
Full version: لماذا لم يصل سعر النفط 200 دولار رغم حرب إيران؟