Summary
Despite the Iran war and Strait of Hormuz closure, oil prices have not surged as feared because China has effectively insulated global markets from extreme supply shocks by harmonizing hydrocarbon fungibility. The market's calm suggests that initial disruption estimates were overstated and that long-term energy price expectations remain anchored.
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•Front-month WTI crude is struggling to hold above $80, far below the $150–$200 spike many predicted after the Iran war began.
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•Reuters reported that initial lost supply estimates of 12–15 million bpd from the Gulf have been revised down to 5–6 million bpd by major trading firms.
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•Iraqi exports are down 2.5–3.0 million bpd, Kuwait down ~1.5 million bpd, and Saudi Arabia and UAE each down ~0.5 million bpd.
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•China consumes far more oil than it produces but has pressure-tested a strategy that largely insulated itself and global markets from severe oil supply shocks.
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•Veteran trader JJ Johnston observed that 'money is bored with misinformation' and that 'you just can't push the river' — markets are ignoring online panic and price is the final arbiter.
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•The article's mental model concludes that the market-manipulation hypothesis is nullified absent severe further escalation of the conflict.