Oil Demand Remains Weak Amid War Uncertainty
The ongoing war between Iran and the US has disrupted both supply and demand in the global oil market, causing uncertainty and volatility. The situation on the supply side is chaotic, with a historic oil glut turning into a significant supply shock.
On the other hand, the demand side has also been affected, with buyers showing less interest in purchasing oil. In fact, hundreds of millions of barrels that had been stuck in the Strait of Hormuz finally came to market last month, but faced a lack of interest from buyers.
Qatar Energy and the UAE state-owned company were forced to lower the price of oil by $6 to $9 per barrel to find buyers in Southeast Asia. Currently, over 18 million barrels of non-Iranian oil are still sitting in tankers outside the Persian Gulf, waiting for buyers.
The situation is even more challenging for Iran, which has faced significant difficulties in selling its oil. Despite a memorandum of understanding with the US, China remained practically the only buyer, importing just 630 barrels per day last month, down from over 1.5 million barrels per day previously.