The Iran war’s big oil mystery: No one seems to want it - CNN

What the report says

CNN reported that the war involving Iran has left the global oil market in an unusual bind: supplies from the Persian Gulf remain unstable, yet buyers are not rushing to take crude that has become available. The report, published July 21, said access through the Strait of Hormuz briefly improved in June, allowing more than 200 million barrels to leave the Gulf, but much of that oil met weak demand.

According to analysts cited by CNN, Qatar Energy and the UAE’s Adnoc had to offer discounts of about $6 to $9 per barrel to attract Southeast Asian buyers. Kpler’s Homayoun Falakshahi said more than 18 million barrels of non-Iranian crude that exited Hormuz were still sitting on tankers outside the Gulf without buyers. Iran also moved 70 million barrels after a memorandum of understanding with the United States and a temporary sanctions waiver, but CNN said China was the only buyer and reduced Iranian purchases sharply.

The biggest factor highlighted in the report is China. CNN cited Signal Ocean Research data showing Chinese crude imports fell from more than 12 million barrels per day before the war to below 8 million. Analysts said part of the drop reflects China’s use of large stockpiles, while longer-term changes such as rising electric-vehicle use and refinery limits may also be reducing demand.

The uncertainty matters because major forecasters disagree on what comes next. CNN said the IEA, OPEC, JPMorgan and Goldman Sachs have different views on demand recovery, while prices have moved higher as the Strait of Hormuz remains volatile.