The global oil market unexpectedly absorbed the largest supply disruption ever recorded, caused by the war in Iran. However, experts believe that dwindling strategic reserves and ongoing geopolitical uncertainties continue to pose a significant risk of further price spikes.
The conflict, triggered by US and Israeli attacks on Iran on February 28, led Tehran to blockade the Strait of Hormuz, a strategic waterway through which a large portion of the world's oil passes. According to the International Energy Agency, this four-month war caused the largest energy disruption in recent history, with supply losses reaching up to 14 million barrels per day at its peak.
Despite this shock, fears of a widespread shortage of gasoline, diesel, or kerosene in Europe and Asia did not materialize. After peaking around $126 a barrel in April, the price of Brent crude fell back to a level lower than that seen before the start of the conflict.
This resilience can be explained in particular by the use of strategic reserves, the rapid reorganization of trade flows, and increased exports from several producing countries. The easing of oil purchases by China also contributed to stabilizing the market.
According to John Baffes, a senior economist at the World Bank, this development shows that market participants considered this crisis serious, but manageable. He believes that global energy and economic systems are now more robust than they were during previous oil shocks.
Analysts, however, warn about the coming months. The reserves that helped cushion the initial shock now need to be replenished, which could increase demand and put upward pressure on prices. In the absence of lasting peace in the Middle East, the oil market remains vulnerable to further tensions that could lead to significant volatility.
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