Crude Oil Prices Risk Hitting $200 as Supply Disruption Worsens
Surface calm in the oil markets may be the biggest risk of all. For months, emergency stockpile releases, rerouted supply and temporary workarounds have hidden the true impact of major disruption to global oil flows. Investors may soon be forced to confront a reality that the physical markets have already started to recognise: the shock isn’t over yet, and the hardest part could still be ahead.
By any rationale, an effective three-month closure of the Strait of Hormuz should have already triggered widespread panic across global markets. After all, roughly 20 million barrels of crude oil typically moves through the narrow waterway every day, representing around 20% of global oil supply. Yet energy markets have remained remarkably calm. Despite the scale of the disruption, oil prices have risen only modestly and broader financial markets continue to behave as though the crisis is negligible. The apparent resilience of the system, however, may be creating a dangerous illusion.