Middle East Crude Supply Recovers, but Uncertainty Persists
Oil prices have stabilized around $90 a barrel as Middle East crude supply has recovered to near prewar levels. However, uncertainty remains about whether this rebound can be sustained.
The Strait of Hormuz, a critical waterway for oil exports, is still operating at limited capacity due to ongoing tensions between the US and Iran. Despite this, refiners' demand for crude is being supported by low inventories of refined products such as gasoline and diesel in the US.
According to Goldman Sachs, around 23 million barrels a day of crude were supplied from the region over the past week through alternative export routes, including the Strait of Hormuz and the Red Sea. This is roughly in line with last year's average.
Rebecca Babin, senior energy trader at CIBC Private Wealth Group, warned that improved supply may be temporary without a credible path to a durable agreement.