Why oil's not at $200 after biggest supply shock in history | Drudge Retort

Saturday, June 06, 2026

Why oil's not at $200 after biggest supply shock in history

For decades, oil traders, executives and analysts warned that closing the Strait of Hormuz would be a global economic catastrophe. It's now been more than three months since the waterway was effectively blocked, creating the worst supply shock in modern history. But a slew of workarounds is keeping crude oil below $100 a barrel, defying many of the industry's grimmest forecasts for prices as high as $200.

Posted by LampLighter at 10:43 PM | 8 COMMENTS | permalink | Comment on This Entry |

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More from the article ...

... A combination of record US exports, a sharp and unexpected slowdown in Chinese demand and a steady trickle of crude still finding its way through the strait has helped absorb much of the shock from the loss of more than 10 million barrels a day of Middle Eastern supply.

A pre-war surplus has also eased the blow. ...

#1 | Posted by LampLighter at 2026-06-06 10:44 PM | Reply | Newsworthy 1

Still more from the article ...

... One of the biggest surprises for the oil market has been China, the world's largest importer. It slashed inbound shipments by almost 40% in May compared to last year's average, according to Vortexa Ltd. The reduction is enough to offset anywhere between a third and a fifth of the barrels lost to the war, depending on the estimates used. ...

#2 | Posted by LampLighter at 2026-06-06 10:46 PM | Reply

That being said, stockpiles cannot keep dropping forever. The US is basically selling the SPR to Europe.

#3 | Posted by REDIAL at 2026-06-06 11:14 PM | Reply

@#3 ... That being said, stockpiles cannot keep dropping forever. The US is basically selling the SPR to Europe. ...

Agreed.

Even as Pres Trump seems to be doing his usual ~performative~ actions ...

For example ...

Trump administration in 'active dialogue' on strategic petroleum reserve in California
www.politico.com

The current strategic petroleum reserve is nowhere near full. And Pres Trump has been draining it.

So, is this new California thing more for immediate political gain for Pres Trump, or a longer strategic gain for the US?

OK, apologies for asking a question about Pres Trump and strategy. I should have known better tahn to ask such a question....

#4 | Posted by LampLighter at 2026-06-06 11:23 PM | Reply

The current strategic petroleum reserve is nowhere near full.

I read that is is within a week of being at its lowest level since it was first filled.

#5 | Posted by REDIAL at 2026-06-06 11:30 PM | Reply

@#5

So why start a new reserve?

#6 | Posted by LampLighter at 2026-06-06 11:46 PM | Reply

So why start a new reserve?

It sounds like a good idea if you don't really think about it too much.

#7 | Posted by REDIAL at 2026-06-07 12:05 AM | Reply

@#3 ... That being said, stockpiles cannot keep dropping forever. The US is basically selling the SPR to Europe. ...

Who cares
~ DialAgain and Gaslighter circa 2022

As I said in 2022 and I'll say it again Its stupid to sell the SPR.

#8 | Posted by oneironaut at 2026-06-07 12:35 AM | Reply

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