Geopolitics and Depleted Inventories Keep Oil Prices Above $100

Oil prices have remained above $100 despite an increase in supply due to ongoing geopolitical tensions and depleted inventories. The war between Iran and the US has disrupted normal traffic through strategic choke points, boosting transit costs.

The Strait of Hormuz is a key route for oil exports, with 20% of global oil passing through it before the conflict began. However, ships navigating these areas have increased costs, with record tanker rates reaching over $1.2 million per day to haul oil from the Persian Gulf to China.

Global inventories are at their lowest point in five years, with stockpiles sitting at 4.3 billion barrels. Meanwhile, global oil demand has recovered, standing at about 104.8 million barrels a day, up 6.5 million barrels a day from its war-time low in May.