Why oil prices haven't gone crazy despite 5 months of US-Iran war
Despite a five-month US-Israel war with Iran that began in late February 2026, oil prices have not spiked as dramatically as analysts feared. Brent crude peaked around $126 per barrel, below the 2008 all-time high of $147, and averaged $101 during the conflict. Key factors preventing a price surge include: China slashing crude imports to near-decade lows due to reduced fuel exports, electric taxi adoption, and lower petrochemical demand; the US pumping a record 13.93 million barrels per day and releasing 400 million barrels from the Strategic Petroleum Reserve; President Trump repeatedly making statements about peace and Hormuz flows that wrong-footed bullish traders; Saudi Arabia increasing shipments from its Red Sea Yanbu port to offset Hormuz disruptions; and ample supply of prompt physical cargoes keeping differentials low. However, analysts warn the situation may not last as fighting resumed in July.
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