What’s Keeping Oil Prices Relatively Low?
Despite a major disruption in Middle Eastern oil supply due to the closure of the Strait of Hormuz, crude oil prices have remained around $100 per barrel. A ceasefire on April 8 and U.S. efforts to calm markets have reduced immediate fears of further escalation. However, the underlying supply shortage remains severe, with nearly 1 billion barrels of lost production expected relative to 2026 forecasts.
- ▪Approximately 13 million barrels per day of Middle Eastern oil production remain offline due to the closure of the Strait of Hormuz.
- ▪The April 8 ceasefire reduced tail risks such as attacks on regional oil infrastructure, leading to a $20 per barrel drop in near-term crude prices.
- ▪Iran's retaliatory strike on Qatar’s Ras Laffan LNG facility cut Qatar’s export capacity by 17 percent for up to five years.
- ▪Commodity markets have not yet reflected severe scarcity because physical inventory declines have not reached critical levels.
- ▪U.S. government messaging has influenced market behavior, helping to suppress price spikes despite ongoing supply shocks.
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Unlocked Dispatch Energy What’s Keeping Oil Prices Relatively Low? A lull in the Iran war has helped prevent price spikes, but the potential for long-lasting market disruptions remains. Rory Johnston / April 28, 2026 Loading Audio Turn any article into a podcast. Upgrade now to start listening. Text Size Members can share articles with friends & family to bypass the paywall. Facebook Twitter LinkedIn Threads Email 0 Open and scroll to the comments section Welcome to Dispatch Energy! In my last newsletter, I argued that the Iran war and the closure of the Strait of Hormuz represented the largest oil supply shock in history.
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