Since the onset of the U.S.-Iran conflict, which has now lasted over 100 days, global crude supplies have decreased by 14%. Despite fears of oil prices soaring to $200 per barrel, this has not occurred, largely due to China's cut in crude imports from 11.7 million barrels per day in February to just under 9 million by late May.
This reduction accounts for approximately 74% of the global decline in crude imports, according to J.P. Morgan analysts, and has helped maintain relatively stable prices. However, Societe Generale warns that as global inventories dwindle and strategic reserves need replenishing, oil prices will likely need to rise.
They noted that the current 30% increase in prices, driven by the supply loss from the Strait of Hormuz, contrasts sharply with the 134% price surge seen during the 1973 OPEC oil embargo. Analysts from SocGen highlighted China's import cuts and reduced refining activity as key factors in rebalancing the market, alongside increased output from other countries and strategic inventory releases.
Brent crude prices recently rose to $97.67 per barrel following renewed tensions between Israel and Iran, with forecasts for future prices varying significantly among analysts. J.P. Morgan suggests that a reopening of the Strait could stabilize prices around $100, while Fitch predicts a sharp decline to an average of $70 per barrel by September if the Strait reopens later in July.
Overall, the consensus is that the equilibrium price for oil is likely to be higher than current market expectations