Yahoo Finance
Oil prices surged above $120 a barrel in April as the Iran conflict choked the Strait of Hormuz and traders feared the worst.
Since then, something unexpected has happened.
Not because the conflict ended, but because the market found a way around it.
Goldman Sachs analysts Daan Struyven and Yulia Zhestkova Grigsby published a note this week laying out why the energy market's recovery matters, what it means for different parts of the energy sector, and why crude oil faces less upside risk than many investors might expect,Bloomberg reported.
The Strait of Hormuz is the single most important oil chokepoint in the world.
About a third of the globe's seaborne oil passes through it on the way from Persian Gulf exporters to global buyers.
When the Iran conflict escalated earlier this year, flows collapsed.
Goldman estimates total crude and oil-product exports through the Strait fell to roughly 5 to 6 million barrels per day in March, down from about 22 to 24 million barrels per day before the conflict,Bloomberg reported.
Since March, that recovery has been steady.
Flows now sit at approximately 15 to 16 million barrels per day.
Still 7 to 8 million barrels short of prewar levels, but well above the March low.
About 6 to 8 million barrels per day of crude specifically is transiting the Strait, according to traders who spoke with Bloomberg.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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