Oil Flows Hit Record High as Prices Remain Elevated

Oil flows from the Middle East have reached their highest level since the start of the war with Iran, but prices remain high at nearly $100 a barrel. This seeming contradiction can be explained by a shift in traders' views on the conflict's duration.

Optimism that an enduring peace deal might be around the corner has given way to concern that hostilities could restart, driving up prices. The United States and other countries have been drawing down their oil stockpiles to bridge the gap between supply and demand, reducing global buffers against future disruptions.

Another factor contributing to high prices is China's increasing oil purchases. Early in the war, the country cut back on imports, but it has now slowly returned to the market. Roughly 30% more oil was loaded onto tankers destined for China in September than in May.