Why didn't oil reach $150 even after three months of the Strait of Hormuz being closed?

Why didn’t oil reach $150 even after three months of the Strait of Hormuz being closed?

Written by Fabio Lucas Carvalho

Published on 26/05/2026 at 08:44

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Even after three months of total closure of the Strait of Hormuz, oil did not reach $150 per barrel because commercial stocks, OPEC’s spare capacity, and temporary adjustments in demand helped contain the rise, although these buffers are finite.

Oil remains just above $100 per barrel about three months after the total closure of the Strait of Hormuz, below the $150 predicted by many analysts, because stocks, spare capacity, and demand cushioned the shock.

Stocks held the first impact of oil

The main brake on prices came from stocks accumulated before the crisis. These barrels gave the market breathing room, allowing refineries, pipelines, and blending operations to continue functioning while the supply from the Persian Gulf remained limited.

This relief, however, does not mean normalization. Global commercial inventories have been falling for weeks. OECD stocks are below the five-year average, while independent trackers like Vortexa and Kpler show constant declines in floating storage.

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Spare capacity helps, but does not replace Hormuz

Another containment factor is the perception that OPEC still has spare capacity. Saudi Arabia and some producers can increase production, but this reserve does not automatically equate to the supply lost by the closure of the Strait of Hormuz.

Not every barrel is suitable for any refinery, because oil quality influences industrial configurations. Moreover, increasing production requires time and coordination. By using this margin, the market reduces its own protection against new shocks.

Lower demand prevented an immediate surge

Demand also contained prices. More expensive oil leads consumers to drive less, airlines to protect or reduce routes, industries to seek efficiency, and emerging markets to adjust fuel consumption.

Uneven global economic growth reinforced this effect, softening some of the pressure. Still, there is no indication of a structural decline in demand in the analyzed material. It is a temporary adjustment at the margins, which may unravel with stronger activity.

If the disruption persists, buffers may deplete. In this scenario, smaller inventories, reduced spare capacity, and resumed demand would leave the market more fragile in the short term, making $150 more plausible without the need for a new shock.

What is the importance of the Strait of Hormuz?

The Strait of Hormuz is important because it functions as one of the main “chokepoints” of oil in the world. It connects the Persian Gulf to the Gulf of Oman and the Arabian Sea, passing between Iran and Oman. A large part of the oil produced by Middle Eastern countries flows through there.

In 2024, the oil flow through the Strait of Hormuz was about 20 million barrels per day, a volume equivalent to approximately 20% of the world’s petroleum liquids consumption, according to data cited by the EIA, the United States energy agency.

Firstly, it is a short and strategic route for oil exports from countries like Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, and Qatar. Secondly, there are not many quick alternatives if the passage is blocked, because pipelines and other routes cannot substitute all the volume transported by ships. Thirdly, any tension there can affect the international price of the barrel.

In practice, when the Strait of Hormuz is threatened, the market fears a lack of supply. This can pressure the price of oil, increase the cost of fuels, transportation, freight, fertilizers, energy, and even food in various countries.

It is also relevant for liquefied natural gas, especially because Qatar is a major LNG exporter. In 2024, a good portion of the oil and gas that passed through Hormuz was destined for Asian markets, such as China, India, Japan, and South Korea.

In summary: the Strait of Hormuz is vital because it concentrates a huge share of global energy trade in a narrow passage. Therefore, any blockade, attack, restriction, or military risk in this region can quickly affect prices, supply, and inflation worldwide.

This article was prepared based on information released by oilprice and zerocarbon . The content was supported by AI tools in editorial organization and underwent human review before publication.

Why didn’t oil reach $150 even after three months of the Strait of Hormuz being closed?

Even after three months of total closure of the Strait of Hormuz, oil did not reach $150 per barrel because commercial stocks, OPEC’s spare capacity, and temporary adjustments in demand helped contain the rise, although these buffers are finite.

Stocks held the first impact of oil

Spare capacity helps, but does not replace Hormuz

Lower demand prevented an immediate surge

What is the importance of the Strait of Hormuz?

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Why didn’t oil reach $150 even after three months of the Strait of Hormuz being closed?

Even after three months of total closure of the Strait of Hormuz, oil did not reach $150 per barrel because commercial stocks, OPEC’s spare capacity, and temporary adjustments in demand helped contain the rise, although these buffers are finite.

Stocks held the first impact of oil

Spare capacity helps, but does not replace Hormuz

Lower demand prevented an immediate surge

What is the importance of the Strait of Hormuz?

With billions in loans, China is rebuilding Nigeria’s railway network from scratch, abandoning the British colonial tracks that have turned to scrap and creating a corridor of over 1,300 km to take the load off the roads of Africa’s largest economy.

Forget petroleum-based asphalt: a Scottish company transforms 684,000 plastic bottles into one kilometer of road that is 60% more resistant and up to 10 times more durable, and the technology has already started replacing traditional asphalt in more than 30 countries.

China is building an artificial island in the middle of the sea, covering 20 km², to construct the largest offshore airport in the world, the Dalian Jinzhouwan. This $4.3 billion project is anchored on more than 3,000 pillars embedded in the rock beneath the ocean and is scheduled to open in 2035.

Austrian engineers have developed an inflatable concrete technology that transforms flat slabs into domes using only air pressure, eliminating scaffolding and temporary forms, and potentially changing the way bridges, tunnels, and curved roofs are constructed worldwide.

A robot named Walter does the work of five bricklayers per hour and can save the construction industry, where the average age of professionals is 46 years and almost no one wants to learn the trade anymore, in the United Kingdom.

Spain installs two giant pipelines 2.2 km off the coast to draw water from the Mediterranean and supply a megafacility capable of producing 200 million liters of drinking water per day.

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