Oil Market Averts 10-20 Million b/d Hormuz Shock, Creating Mini-Glut
Updated
Updated · Forbes · Jun 18
Oil Market Averts 10-20 Million b/d Hormuz Shock, Creating Mini-Glut
3 articles · Updated · Forbes · Jun 18
Summary
A 100-day Strait of Hormuz closure failed to produce the feared oil shortage, with market adjustments instead leaving a crude “mini-glut” even before the latest ceasefire and reopening deal.
About 7 million b/d of extra supply appears to have emerged in 90 days, led by U.S. exports, Saudi and UAE bypass pipelines, and output gains from Canada, Norway, Brazil and Venezuela.
Demand fell just as sharply: The Economist estimated major importing regions bought 11 million b/d less oil than a year earlier, including a 6.6 million b/d drop in China’s purchases.
WTI still stayed above $80 for much of the crisis because prices reflected not only physical supply-demand balances but also a war-risk premium that had spiked above $112 and then faded.
With Brent already slipping below $80 after shipping resumed, the report argues reopening Hormuz could turn the mini-glut into a larger oversupply as OPEC+, U.S. drillers and weaker demand keep pressure on prices.
Oil prices plunged on the peace news, but why might your relief at the gas pump be months away?
What was Pakistan's true price for brokering a peace deal that saved the global economy from collapse?
With thousands of mines still in the water, is the world's most vital oil route actually safe to reopen?
US-Iran Ceasefire 2026: Market Surge, Oil Shock, and the Fragile Path to Regional Stability
Overview
In June 2026, global financial markets responded positively to progress in US-Iran ceasefire negotiations, with the Russell 2000 index jumping 3 percent. This surge was driven by anticipation of easier interest rates, which especially help smaller companies that rely on borrowing to grow. Diplomatic efforts, led by Qatar and Pakistan, brought the ceasefire agreement close to completion, boosting market optimism. However, tensions remained high as incidents in the Strait of Hormuz showed ongoing security risks. Overall, hopes for a deal and expectations of improved economic conditions fueled market gains, even as regional stability remained fragile.