Why oil hasn’t ruined the global economy. With Rory Johnston

The global oil market remains in a precarious state following the closure of the Strait of Hormuz, which initially sparked fears of prices reaching $200 per barrel. While crude supply volumes have largely recovered due to expensive rerouting and heavy discounting by producers, the market faces persistent structural fragility. China’s unprecedented reduction in crude imports—roughly 5.5 million barrels per day—served as a critical, albeit quiet, buffer that prevented a total price collapse. Despite this, refined product markets continue to struggle with supply bottlenecks caused by refinery attacks in the Middle East and Russia. Looking ahead, the potential for further geopolitical escalation threatens to exhaust remaining inventories, leaving the global economy vulnerable to sustained high prices and potential recessionary pressures as the market grapples with a lack of underlying supply and high shipping costs.