What’s Keeping Oil Prices Relatively Low?
Despite the closure of the Strait of Hormuz and the loss of 13 million barrels per day in oil supply, prices have remained around $100 due to a ceasefire, U.S. government messaging, and slow inventory drawdowns. Market pricing has been restrained by reduced fears of escalation, White House interventions, and the lag between supply shocks and physical scarcity. Prices have not surged because traders await clear signs of inventory depletion, with near-term physical barrels trading at a premium while futures remain muted. The UAE's exit from OPEC and extended Jones Act waivers further shape market dynamics amid ongoing geopolitical uncertainty.
- ▪The Strait of Hormuz remains closed, cutting off about 13 million barrels per day of Middle Eastern oil production.
- ▪A ceasefire on April 8 and repeated White House statements have reduced market fears and suppressed oil price spikes.
- ▪Oil prices remain elevated but stable because markets are reacting to actual inventory draws rather than anticipated shortages.
- ▪The UAE has left OPEC, marking a significant shift in the cartel’s influence and likely increasing future Emirati oil output.
- ▪The U.S. extended a Jones Act waiver, allowing more flexible domestic fuel transport to ease energy supply pressures.
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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 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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