Oil Markets Oscillate Amid Geopolitical Tensions
The oil market has been experiencing significant volatility in recent weeks due to ongoing geopolitical tensions in the Gulf region. Despite initial fears of a supply shock, data suggests that oil is still reaching global markets through alternative routes.
The Strait of Hormuz, a critical waterway for oil exports, was formally closed by Iran following the outbreak of the US-Israeli conflict on February 28, 2026. However, Rystad Energy estimates that around 13 million barrels per day of Gulf oil is still reaching global markets through alternative channels.
According to a report from Petroleum Australia, while overall volumes from the Gulf are reduced, oil continues to reach global markets through multiple channels. The mechanics of this logistical improvisation involve overland pipeline diversion, tanker network adaptation, and blending and re-export hubs.
This situation has led analysts to conclude that Iran's chokepoint leverage may be depreciating over time rather than appreciating. Tony Sycamore, an analyst at IG Markets, noted that the longer this situation persists, the more these alternative routes will progressively erode Iran's leverage.