- International crude oil futures closed nearly flat on Thursday, with Brent crude rising slightly by 0.09% to $105.72 per barrel, and U.S. crude settling at $101.17. The wide intraday fluctuations reflect the market's repricing of risks between the partial release of ships in the Strait of Hormuz and ongoing incidents of attacks and seizures.
- There is intense competition between macroeconomic fundamentals and geopolitical risks. The International Monetary Fund has sharply lowered its forecast for global real GDP growth this year from 3.4% to 2.5%, while the International Energy Agency warns that global oil inventories are being depleted at an unprecedented rate, with the supply-demand gap continuing to widen.
- The leaders of China and the United States have reached a consensus on maintaining the smooth passage of the Strait of Hormuz, with China expressing its intention to increase imports of U.S. crude oil to replace Middle Eastern shares. However, the daily passage of 30 ships through the strait remains far below the pre-war normal level of 140 ships, indicating that logistical bottlenecks have not been substantially resolved.
Marginal Unblocking of the Strait and the Stickiness of Geopolitical Premiums
The calm close of the oil market on Thursday masked the intense intraday volatility. Brent crude briefly hit a high of $107.13, then gave up gains as news emerged of some tankers successfully crossing the Strait of Hormuz. The Iranian Revolutionary Guard released about 30 ships, including a Chinese supertanker detained for more than two months carrying 2 million barrels of Iraqi crude, and a Panama-flagged tanker managed by Japan's Eneos. This sign of marginal unblocking temporarily alleviated extreme panic in the spot market. However, the sinking of an Indian cargo ship near Oman and the seizure of a vessel anchored off the coast of Fujairah, UAE, demonstrate that the navigational environment in these waters remains fraught with force majeure. Derivatives traders cannot fully strip geopolitical risk premiums from pricing, causing oil prices to show strong downward stickiness above $105.
Great Power Rivalry and the Potential Reshaping of Oil Trade Flows
The White House is actively intervening to control the economic spillover effects of the Iran conflict, with the consensus reached by China and the United States on ensuring the smooth flow of energy lifelines becoming a key variable in stabilizing market expectations. Notably, to reduce dependence on Middle Eastern oil, China has expressed its intention to increase purchases of U.S. crude oil. Since halting imports in May 2025 due to trade tariff issues, China has been absent from the U.S. crude oil market. If this purchasing intention materializes, it could not only offset the supply reduction caused by the Strait of Hormuz blockade but also profoundly reshape trans-Pacific energy trade flows. Analysis by Matador Economics suggests that Iran's decision to release some Asian ships at this time is largely based on considerations to avoid losing support from core crude buyers amid Sino-U.S. energy strategic cooperation.
Macroeconomic Headwinds and Inflation Expectations' Grip on Oil Prices
Despite the threat of physical supply disruptions, the suppressive effect of macroeconomic headwinds on oil prices is becoming increasingly apparent. On Wednesday, Brent and U.S. crude oil futures recorded significant declines of over $2 and $1, respectively, driven by market concerns over U.S. interest rate hikes to curb high inflation. As oil prices remain above the $100 range, the surge in energy costs is transforming into a stubborn component of broad inflation. The International Monetary Fund has clearly pointed out that the global economy has entered an adverse intermediate scenario, with GDP growth significantly weakened to 2.5%. This demand destruction and economic slowdown expectation due to high energy prices constitute the core resistance to further upward breakthroughs in oil prices.
Spot Inventory Depletion and Forward Curve Shape
The tight supply-demand situation in the spot market is being confirmed by the sharp decline in inventory data. The International Energy Agency's report indicates that global oil supply will not meet total demand within the year, with inventory depletion reaching a historic high. As the daily passage through the Strait of Hormuz plummeted from 140 ships to 30, refineries have been forced to heavily utilize commercial and strategic reserves to maintain operating rates. This real physical shortage has caused the forward curve of crude oil futures to exhibit an extremely steep spot premium shape, with the price of contracts for immediate delivery far exceeding that of forward contracts. If the attacks in the waters surrounding the UAE and Oman prevent the strait's traffic from returning to normal levels, the global energy system's inventory buffer will be completely exhausted in the coming months.
