With Hormuz reopened, has the oil shortage turned into a glut?
News
As flow resumes through the strait, an oil surplus may yet again destabilise global energy markets.
The Strait of Hormuz is reopening faster than expected, after the US and Iran signed a memorandum of understanding (MoU) and launched indirect talks in Qatar to discuss the flow of shipping.
Global oil prices have fallen back, providing respite to consumers at the petrol pump. For a third consecutive day on Thursday, oil prices dropped about 1 percent, after Qatar said Iran and the US had made progress in discussions about the critical waterway, which handled one-fifth of global oil supply before the US and Israel first launched strikes on Iran on February 28.
Details
list of 3 items- list 1 of 3US-Iran talks in Doha: What were the outcomes and what’s next?
– list 2 of 3‘The crisis is deep’: The view from Russia as fuel shortages worsen
– list 3 of 3Trump says record boats leaving Hormuz, calls communism ‘biggest threat’
Analysis
But as oil flows suddenly resume, there is alarm over the weakening of oil demand, mainly driven by China – the world’s largest oil importer – slashing imports.
Investment banking group Morgan Stanley cut oil forecasts for the second time in two weeks, warning of the risk of a glut – a severe oversupply of crude oil in the global market that outpaces consumer demand.
Analysts say such a forecast is contingent on Chinese oil imports remaining at a low level, as well as on the fragile truce between the US and Iran remaining on solid ground.
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