$75.20/bbl per barrel. That's where Brent crude closed Thursday, according to market data—up +0.51% on the day—despite President Trump threatening to seize Iran's main oil export terminal and assume "total control" of the country's oil and gas markets. The price should be higher. Much higher. Kharg Island accounts for about 90% of Iran's crude shipments before the war , and about 25% of the world's seaborne oil trade transited the Strait of Hormuz before the conflict began in late February. Yet oil has barely budged past $75 in recent sessions, even as Trump said in a Truth Social post that the U.S. military will attack Iran "VERY HARD" tonight and threatened to take "total control" of Iran's oil and gas markets as the U.S. did in Venezuela earlier this year .
The reason prices haven't spiked to $150? Two forces are colliding. First, Chinese state-owned refiners have cut processing rates to record lows, while gasoline and diesel sales both posted double-digit declines in April as the world's largest crude importer learns to live without Middle Eastern barrels. Second, OECD inventories are forecast to fall to just under 2.3 billion barrels by December 2026, the lowest level since 2003 , the EIA reported this week. The market is drawing down stockpiles at a record pace— observed global inventories were drawn down by 250 million barrels over March and April, or 4 million barrels per day , according to the IEA. That cushion won't last. And when it runs out, the real price shock begins.
Can Tankers Going Dark Hide a Supply Crisis?
The Strait of Hormuz has become a black box. Dark transits through the Strait of Hormuz have accounted for 57% of all transits recorded over the period, peaking at 65.2% in May , vessel-tracking firm Vortexa reported last week. Kuwait has shipped a cargo of liquefied petroleum gas out of the Persian Gulf through the Strait of Hormuz using a tanker it controls, with the Gas Umm Al Rowaisat transiting the strait before transferring the LPG cargo to another vessel heading for India's Paradip port , Bloomberg reported Thursday. The tanker went dark after loading, reappearing near India days later.
"AIS-off movements through Hormuz are no longer only a sanctions-evasion signal. They have become a wider commercial response to conflict risk, operational uncertainty, and the need to keep Gulf cargo moving," said Claire Jungman, Director of Maritime Risk & Intelligence at Vortexa. Senior shipping executives and Asian oil buyers paint a picture that Hormuz is now a lot less blocked, with transits becoming more steady and greater in volume, with the increase in Gulf producers' ships going dark to sneak through undetected by Iran at the heart of the rise in flows .
The opacity creates a dangerous information vacuum. If 2 million barrels per day are sneaking through in dark mode—as some analysts estimate—markets are underpricing the risk. If those flows stop, there's no early warning system.
Why Is China Learning to Live Without Oil?
China's oil consumption fell 9% in recent months, JPMorgan estimates— a drop of about 1.5 million barrels per day that happened "abruptly, unexpectedly, and with remarkably little visible disruption" . Chinese imports of Iranian crude—a key feedstock for the country's independent refiners—have fallen as deteriorating margins, tighter US sanctions and Washington's blockade of the Islamic Republic's ports curb flows , according to industry consultant JLC.
The shift is structural, not cyclical. Various forms of substitution have avoided oil demand growth of around 15% (or 1.2 million barrels per day) in China since 2019 , the IEA noted, driven by accelerating EV penetration and a pivot from manufacturing to services. China has stopped aggressively buying oil to build rainy day stockpiles, refineries have cut the amount of crude they're processing and changed the mix of what they produce, and they're using coal to produce certain chemicals instead of oil , Axios reported.
OPEC isn't buying it. The cartel downgraded its forecast for global oil demand growth for a second consecutive month, with demand now projected to increase by 970,000 barrels per day in 2026 , Argus Media reported Thursday—down from 1.17 million barrels per day last month. But OPEC Secretary General Haitham Al Ghais said OPEC was maintaining its forecast for oil demand growth of 1.2 million barrels per day this year, adding "Despite all the commentary out there that oil demand is declining, we have not registered signs of that yet" at the St Petersburg forum this week. Someone's math is badly wrong.
