Despite the escalating conflict between the US and Iran causing significant disruptions to shipping routes in the Strait of Hormuz and the Red Sea, global Brent crude prices have struggled to consistently break the $100-per-barrel mark. While Middle Eastern export volumes have dropped from their pre-war levels, Gulf producers have effectively pivoted to alternative logistics and ship-to-ship transfers to keep supply moving. At the same time, increased production from non-OPEC nations like the US, Canada, and Guyana, combined with steady exports from Russia, has helped cushion the global market against the immediate impact of regional supply gaps.

Furthermore, the market is currently navigating a period of notable "demand destruction," particularly in China, where the rise of transport electrification and a shift toward coal-based chemicals have cooled appetite for crude. While financial analysts remain cautious, with some banking institutions raising their price forecasts for late 2026, the current physical market remains a study in contrasts. Even though spot premiums and diesel prices indicate a genuine supply squeeze on the ground, the combination of Beijing’s massive strategic reserves and the ability of producers to reroute shipments has kept a lid on runaway oil prices for the time being.