Brent crude has slid from a March peak of $118 to below $95 even though the Strait of Hormuz has stayed largely shut for more than three months, disrupting flows equal to about 13% of global supply.
Trump’s repeated claims that a U.S.-Iran deal is imminent have helped cool prices, but Reuters says there is little evidence of a durable agreement and any reopening would not quickly restore normal tanker traffic.
Global inventories are being drained at extraordinary speed—5.27 million bpd in March, 8.62 million bpd in April and likely near 9 million bpd in May—raising the risk of a sharp price spike if storage nears operational limits.
China adds another major unknown: its seaborne crude imports fell to 6.36 million bpd in May, the lowest in nearly a decade, but opaque data leave traders unsure whether demand is collapsing or reserves are being tapped.
The IEA now expects global oil demand to contract by 420,000 bpd in 2026, yet with supply, inventories and consumption all hard to gauge, the market’s calm rests heavily on sentiment rather than clear fundamentals.
With global oil reserves draining at a record pace, what happens when the world's emergency buffer runs dry?
Is China's massive oil import cut a sign of economic crisis or a calculated strategic move against the West?
Brent Crude Dips Under $95: Hormuz Blockade Triggers Global Oil Supply Crisis and Energy Transition Surge
Overview
Brent crude prices have dropped below $95 due to an unprecedented disruption in the Strait of Hormuz, a key route for global oil shipments. This disruption has severely impacted global oil supply and comes amid heightened geopolitical tensions in the Middle East, making oil markets highly volatile for months. The situation escalated with disagreements between the U.S. and Iran over ending the regional conflict, leading to renewed concerns about oil supply. These events highlight how sensitive the oil market is to geopolitical risks, with immediate effects on prices and global energy security.