Oil Prices Soar on Persistent Middle East Supply Disruptions

Oil prices are surging again, driven by supply disruptions in the Middle East. The latest attacks on shipping in the Strait of Hormuz and Bab el-Mandeb have deepened concerns that supply disruptions could last longer than expected.

The US Energy Information Administration estimates only 4.9 million barrels a day of crude and petroleum liquids moved through Hormuz in the second quarter, down from 21.6 million barrels a day in the final quarter of 2022.

US refiners are already feeling the squeeze as oil prices rise while gasoline and distillate stock signals remain mixed. If crude continues to rally towards $90, margins could get squeezed unless product prices catch up immediately.

The disruption has changed the supply picture, with the EIA expecting global oil inventories to fall by an average 3.8 million barrels a day in the third quarter.