The market is interpreting the increase in flows through the Strait of Hormuz as a signal that the crisis is now behind us. This is probably the biggest mistake of this phase. Tankers are returning to transit, but much of the volume increase does not come from additional production: it is simply the release of oil that had been stuck for months on ships waiting to cross the Strait. In other words, the market is consuming its floating stocks and interpreting it as new supply.
This distinction is fundamental. As long as the system feeds itself by emptying the reserves accumulated during the crisis, the impression will be of an abundant market. When this process ends, probably already between July and August, the flow will again depend exclusively on the actual production capacity of exporting countries. And this is where rigidities will re-emerge.
Exports from the Gulf remain below pre-war levels, while other elements supporting supply are also progressively diminishing. The United States is reducing the use of strategic reserves and will hardly be able to maintain the high export levels observed in recent months. This means that an increasing share of global demand will have to be met by drawing on commercial stocks, accelerating their depletion.
The demand side also appears stronger than the market is pricing in. Refining margins remain at exceptionally high levels, a sign that the demand for petroleum products continues to rapidly absorb the available supply. If demand had truly collapsed, as many predicted during the war, crack spreads would have already fallen. The opposite is happening.
The other major variable remains China. For months, Beijing has reduced international purchases by exploiting its internal reserves. However, the rapid decline in stocks suggests that this strategy is reaching its limits. If imports were to resume decisively in the second half of the year, the market could face additional demand just as supply slowly returns to normal.
The reality is that the global energy system has now consumed all the safety margins built up in recent years. Strategic reserves have been used, tankers stopped at sea have been emptied, refinery utilization rates have been increased, and every possible form of logistical flexibility exploited. The market has avoided a real supply crisis, but at the cost of almost completely exhausting its buffers.
For this reason, the recent price drop risks sending a misleading message. It is true that the most extreme scenarios are now less likely than during the war months, but the structural damage done to the system does not disappear with the reopening of Hormuz. Rebuilding commercial and strategic stocks will take months, probably years. Until then, any new supply disruption, even if limited, will have much more violent effects than in the past.
In essence, the market has not returned to normal. It has simply replaced a visible emergency with a less evident fragility. And it is precisely this new fragility that justifies a structurally higher risk premium on oil. Prices may fluctuate in the short term, but as long as the system remains without reserves and unused capacity, it will be difficult to imagine a stable return to pre-war levels. Oil has avoided the worst, but it has lost its safety margins. And this is the true legacy of the crisis.
