Despite a formal blockade, a surprising volume of crude oil, potentially over 2 million barrels per day, is transiting the Strait of Hormuz. Vessels are using clandestine methods like turning off transponders, which helps explain the market's relative calm despite the major supply disruption.
Oil demand has contracted by nearly 2 million barrels per day, a scale comparable to the 2009 global financial crisis. This surprisingly sharp and rapid adjustment from consumers and industries is a key factor absorbing the current supply shock, indicating a more flexible global economy than previously understood.
Despite being historically high, European gas prices remain at a discount to Asian markets. This price gap disincentivizes LNG flows to Europe, threatening the continent's ability to fill storage for the winter. J.P. Morgan suggests prices must increase to attract the necessary gas molecules away from Asia.