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<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div><\/div>\n<\/div>\nWhen the Strait of Hormuz tightened, many braced for $200-a-barrel oil. More than three months on, that nightmare scenario is still nowhere in the picture.The disruption, which removed more than 10 million barrels a day of Middle Eastern supply from the market, had fuelled warnings of crude prices soaring to as much as $200 a barrel. Instead, oil has remained below the $100 mark, supported by a combination of stronger US exports, weaker Chinese demand and alternative supply arrangements.\u201cPeople thought it was going to be a lot worse,\u201d President Donald Trump said Friday. \u201cToday I looked at $96 a barrel, people thought that was going to be $300 a barrel.\u201d After US and Israel launched joint strikes on Iran, the country tightened its noose on the crucial Strait of Hormuz. The chockhold disrupted oil supplies across the world as the passage carried 20% of global energy supplies. Consequently, crude prices soared beyond the $125 per barrel mark from the $70 levels earlier. Now, fuel prices are swinging near the $100 per barrel range, far below analyst’s predictions.Here’s what has kept crude prices from hitting the $200 mark yet:<\/p>\n Oil-producing nations in the Persian Gulf have sought alternative routes to maintain exports. Saudi Arabia has redirected crude through its East-West pipeline to the Red Sea, while the United Arab Emirates has used pipelines leading to Fujairah outside the Gulf.Some vessels have continued using the Strait of Hormuz despite the risks. According to shipping data, daily transits have dropped to two or three ships from almost 100 before the conflict. However, an official familiar with US Central Command operations cited by Bloomberg reported a much higher figure, saying nearly 1,000 commercial vessels had crossed the waterway over the past two months.\u201cAs a bare minimum of what counts as a \u2018meaningful recovery\u2019 I think that we would need to see a full week averaging 20 ships per day \u2014 and that\u2019s not realistic until there is a durable US-Iran settlement, which keeps getting pushed out,\u201d said Pavel Molchanov, an analyst at Raymond James.<\/p>\n At the same time, China, world’s largest oil importer, reduced inbound shipments by nearly 40% in May compared with last year’s average, according to Vortexa Ltd. The decline has helped offset a significant portion of the barrels lost due to the conflict.Analysts attribute the slowdown partly to the country’s decision to halt expansion of its strategic reserves. Increased use of coal in chemical production and growing electric vehicle adoption have also weighed on oil consumption.Estimates from Kpler and Energy Aspects Ltd. place Chinese refinery throughput in May and June at around 13 million barrels a day, compared with an average of 14.8 million barrels a day last year.\u201cChina\u2019s backing off from the crude market has played a crucial role in attempting to rebalance the global market, which has helped cap oil prices,\u201d Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore told Bloomberg. \u201cThe extent of which has taken most of the market by surprise.\u201dMeanwhile, the United States also stepped up exports. American shipments of crude and fuel in May were more than 2 million barrels a day higher than the average recorded throughout last year.\u201cOver three months into this conflict, the world has proven surprisingly resilient,\u201d Maria Angelicoussis, chief executive officer of Angelicoussis Group, said in remarks this week. \u201cCommodity prices are up by 50% or 60%, Asian LNG prices by 90%, but they\u2019re not at the sky-high levels that at least I would have personally expected.\u201dThe US has relied heavily on its position as a major energy exporter to support markets, pledging to release 172 million barrels from the Strategic Petroleum Reserve. Nearly half of the released barrels have been shipped overseas, including to Europe.Market sentiment has also been shaped by expectations that a diplomatic resolution remains possible. Traders have become cautious about maintaining large bullish positions, with open interest in Brent crude futures falling to its lowest level since August.Meanwhile, the Middle East chaos that began back on February 28 has continued to strain oil markets, for almost 100 days now. <\/div>\nGoing Hormuz and beyond
<\/h2>\n<\/p>\nRestraining and rerouting oil flows
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