Meghan O'Sullivan

The oil market proved resilient to a historically large supply disruption thanks to three buffers: redundant export infrastructure, coordinated strategic reserve releases, and a significant drop in Chinese globally-traded oil demand. However, those buffers have been whittled down since February, leaving the market in a more vulnerable position today. A similarly-sized prolonged disruption now would likely cause a larger price spike, implying upside risk for crude oil.