ASKING (AND ANSWERING) THE IMPORTANT QUESTIONS: Hormuz Is Disrupted, Saudi Oil Is Under Attack. So Why Is Oil Still Below $100?
The reason is not that the disruption has been minor. It is that several emergency measures have replaced enough lost supply to prevent a full scale supply shock from reaching the market.
The most important factor has been the U.S. military operation inside the Strait of Hormuz.
According to U.S. Central Command, American forces have helped approximately 1,000 vessels carrying 500 million barrels of crude transit the Strait since early May under Operation Project Freedom. Spread across approximately 86 days, that equals an average of about 5.8 million barrels of crude per day continuing to reach global markets under U.S. protection.
Before the conflict, roughly 15 million barrels of crude and condensate passed through Hormuz every day, while total petroleum flows approached 21 million barrels daily. The volume protected by CENTCOM therefore represents almost 40% of prewar crude flows through the Strait.
That does not mean Hormuz is operating normally. Independent shipping trackers continue to report substantially lower tanker traffic than before the war, and some vessels are likely transiting with AIS transponders turned off. Even so, millions of barrels continue reaching customers instead of remaining trapped inside the Gulf, preventing an even larger disruption.
Despite efforts by Iran and its proxies to close Hormuz and now the Red Sea, too, disruptions are much less severe than they were the last time around in March and April.
