In the past week, rising tensions along the Israel-Lebanon, Israel-Iran, and US-Iran lines in the Middle East have strengthened expectations of a sharper rise in oil prices. However, Brent crude oil prices have remained calm at around $92.25 per barrel.
This relative market calm is attributed to increased transit through the Strait of Hormuz and more optimistic statements from the US. Additionally, the rise in the dollar index and US bond yields is said to be putting pressure on commodity prices.
Decline in China's demand limits prices
The first factor suppressing oil prices is the decline in China's seaborne crude oil imports. As one of the world's largest buyers, China has reduced purchases from external markets by using its own reserves, leading to a decrease in the amount of oil withdrawn from the global market.
Data shows that China's seaborne crude oil imports fell from 11.39 million barrels per day in February 2026 to 8.10 million barrels in April and approximately 6.4 million barrels in May. Compared to pre-war levels, this represents a daily decrease of about 5 million barrels, roughly equivalent to a quarter of the oil passing through the Strait of Hormuz.
US exports increase
The second factor is a significant rise in US oil exports. As supply risks from the Middle East increased, US crude oil became an important alternative for the global market.
US exports reached 6.44 million barrels per day in April. This level helped ease demand particularly in Europe and Asia, whereas pre-war daily exports ranged between 3.5 and 4 million barrels.
Alternative routes to Hormuz activated
The third factor curbing prices is the increased use of pipelines partially bypassing the Strait of Hormuz in the Gulf. Saudi Arabia's East-West pipeline and the United Arab Emirates' Habshan-Fujairah pipeline, while not fully replacing the strait, have created a critical buffer.
Daily oil flow through these pipelines is estimated between 3.5 and 5.5 million barrels. This has somewhat mitigated the impact of any potential disruption in flows through Hormuz.
Strategic reserves fill the gap
The fourth factor is the deployment of strategic reserves. Since the start of the conflict, observable global oil stocks have decreased by about 246 million barrels, indicating a daily drawdown of roughly 4 million barrels.
Accordingly, about 20% of the oil unable to pass through Hormuz has been supplied from reserves. Although risk perception remains high in global markets, these four factors have so far restrained a sharp rise in prices.
