Middle East Conflict Sends Oil Prices Soaring Again

Oil prices have surged again as tensions in the Middle East escalate and disrupt regional oil exports. Despite earlier relief from April peaks, benchmark oil prices are now on an upward trend due to renewed hostilities in the region.

The Strait of Hormuz, a critical waterway for oil shipments, has seen flows average 7.6 million barrels per day (mb/d) in August, down 13.1 mb/d from pre-war levels, with cumulative export losses nearing 2.8 billion barrels.

Higher non-Gulf production and weaker global demand have provided some relief, but global oil inventories have fallen by 507 million barrels since the start of the war, raising concerns over tightening supply buffers if Gulf exports remain constrained.