Markets initially assumed a near-total stop to non-Iranian crude exports from the Gulf after Tehran declared the Strait of Hormuz "closed", a scenario that briefly pushed Brent futures to nearly $120 per barrel in early March. Those first-cut estimates summed up all non-Iranian Gulf exports - roughly 12 to 15 million barrels per day - and implied one of the largest supply shocks on record.
News of suspended sailings, tankers anchoring and forecasts of much higher prices - at times cited in the media as high as $200 per barrel - contributed to an inflationary anxiety among consumers and businesses. The situation was made harder to track because several factors limited visibility into vessel movements, including restrictions on satellite imagery over parts of the Gulf and deliberate spoofing of ship locations.
But subsequent evidence gathered by ship-tracking services, and statements from officials and traders, has altered the market's calculation. Tankers have continued to transit and export oil - some visible to tracking firms, others less so - and that flow of crude has helped explain why prices have fallen back below $90 despite the conflict continuing.
One high-profile public comment said that more than 100 million barrels of oil had passed through the strait as part of a covert mission to escort tankers. Independent shipping-data firm Kpler estimated that about 136 million barrels of non-Iranian crude moved through Hormuz and Gulf of Oman export channels between the start of April and June 10 - an average of roughly 1.9 million barrels per day.
"After an initial disruption at the onset of the conflict, flows strengthened as alternative logistics scaled up," Kpler said, pointing to a period in which exporters and traders adjusted to the security threats and to limitations on conventional shipping routes.
Those "alternative logistics" have included Iraq, Kuwait and the United Arab Emirates exporting large quantities of crude on tankers that had their satellite tracking systems turned off - in some instances operating in coordination with Iran and in other cases without such arrangements, according to trading sources. These opaque shipments add to roughly 4 to 5 million barrels per day of oil that Saudi Arabia has been shipping from its Red Sea port of Yanbu since March.
There is a wide divergence between official estimates of lost Gulf production and calculations circulating among major trading houses. The International Energy Agency recently estimated a Gulf supply decline of about 14 million barrels per day, equivalent to roughly 14% of global crude supply. By contrast, two sources at large trading companies, using internal assessments that account for rerouted logistics and clandestine sailings, put the shortfall at nearer 5 to 6 million barrels per day.
One of those trading-company calculations breaks down the deficit differently: Iraq may be exporting 2.5 to 3.0 million barrels per day less than normal, Kuwait around 1.5 million less, and Saudi Arabia and the UAE each down by some 0.5 million barrels per day.
Other market-moving elements have also helped blunt the price impact of the Gulf disruption. A rise in U.S. crude exports, a coordinated international release of 400 million barrels from emergency stockpiles, and weaker-than-expected Chinese demand have all contributed to easing immediate tightness. Taking the drop in Chinese demand into account, one trading-source estimate suggests the effective market shortfall could be as little as 2 million barrels per day.
Bjarne Schieldrop of SEB summed up the effect on prices by saying the flows and adjustments are "an indication that commercial oil markets are sufficiently supplied for now given all the ways the world has adapted to the shock."
Even so, the coping measures have limits, and inventories are falling rapidly. The U.S. Energy Information Administration reported that stockpiles in the world's largest economies are moving toward their lowest levels since at least 2003, being drawn down at a record pace as a result of the lost Gulf output.
Analysts at S&P Global Energy point to two major U.S. storage hubs where inventories have fallen to about 351 million barrels. They regard roughly 325 million barrels as a "danger zone"; once inventories slide below that threshold, the market becomes increasingly susceptible to logistical bottlenecks and renewed price spikes, S&P Global Energy said.
The juxtaposition is now clear: adaptive logistics and larger-than-expected tanker movements have materially reduced the immediate supply hole, helping to rein in prices from their March highs. At the same time, global and U.S. inventories are declining toward levels that could make the market more vulnerable to any fresh disruption.
That tension - between visible flows keeping the market supplied today and shrinking buffer stocks that could amplify tomorrow's shocks - is the central risk facing oil markets while the conflict and the associated maritime security threats persist.