Strait of Hormuz Keeps Oil Prices High Amid Weak Demand
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- Strait of Hormuz remains a critical chokepoint constraining oil flows, keeping prices elevated even as more LNG tankers successfully transit the area.
- Brent crude climbed to $94 following missile attacks between Iran and Israel, reflecting heightened regional tensions impacting energy markets.
- Chinese demand weakens, with oil imports dropping to an eight-year low and refining capacity delayed by 500,000 barrels per day amid Hormuz disruptions.
- Iranian crude prices are cut due to weak Chinese demand, while an Iranian official signals plans to reopen the Strait of Hormuz under a new toll regime.
- Saudi Arabia slashes oil prices again, responding to declining Asian demand despite OPEC+ approving a modest output increase for July.
Why it matters: The persistence of elevated oil prices despite falling demand in key markets like China shows that geopolitical risk in the Strait of Hormuz is currently outweighing fundamental supply-demand imbalances. This shifts leverage to producers in unstable regions and increases costs for import-dependent economies, even as OPEC+ cautiously adjusts output.
