The shutdown of the Strait of Hormuz since February 28 has shaken the oil market. More than 15% of global oil supply has been removed.
This is one of the biggest disruptions ever seen. Many expected prices to spike sharply. Some forecasts even pointed to $150 or $200 per barrel. Brent crude has only climbed to around $90 to $100.
According to Yardeni Research, several factors are keeping prices in check.
Why Brent crude prices remain stable after supply shock
One key reason is alternative supply routes. Countries like Saudi Arabia and the United Arab Emirates are using pipelines. Together, they are moving about 7 million barrels per day.
Emergency supply has also helped. Waivers on oil from Iran and Russia added more barrels to the market.
Global reserves played a role too. The International Energy Agency released stockpiles. China also sold some of its reserves. Another factor is demand. Consumption is slowing. The IEA now expects global demand to fall by 80,000 barrels per day in 2026.
The global economy is also less dependent on energy than in the past. This reduces the impact of supply shocks.
Asia oil prices spike while global outlook stays controlled
Prices are not equal everywhere. In Asia, Dubai crude has surged to as high as $260 per barrel.
This shows how regional shortages are driving sharp price gaps. Buyers in Asia are paying heavy premiums. At the same time, futures markets tell a calmer story. Prices are in backwardation. This means traders expect the disruption to be temporary.
Yardeni Research believes Brent crude will stay between $85 and $100 for the rest of the year. The firm also noted that interest rate hikes are unlikely for now. Inflation expectations remain stable. There is no strong sign of a wage price spiral yet.
The oil market is under pressure. But it is proving more resilient than expected.