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For two months, the economic narrative surrounding the conflict with Iran has focused on one clear conclusion: energy prices have risen and the risk of an economic slowdown has increased. However, according to a CNN analysis, this picture does not fully match the reality in the market.
Although oil and gas prices remain high, they have not reached the levels that would be expected after such a major disruption to global supply.
In 2022, after the Russian invasion of Ukraine, fears of a loss of about 3 million barrels per day drove the price of oil above $120 per barrel, while gasoline in the US reached about $5 per gallon. In the current case, the supply disruption is estimated at about 14 million barrels per day after the closure of the Strait of Hormuz, but prices are hovering around $110 per barrel.
At the beginning of the crisis, many analysts predicted that oil would reach at least $150 per barrel, and some even higher. But that did not happen.
"I would expect prices to be above $200. It's crazy," said Matt Smith, chief oil analyst at Kpler.
"Everyone is trying to understand what's happening ," he added.
According to CNN, current developments show that classic supply and demand mechanisms are not enough to explain the situation. Analysts note that "the numbers don't add up" and that other factors are influencing the market.
One possible explanation is increased production outside the Persian Gulf, particularly in the United States and Latin America. However, this increase is not enough to compensate for the loss of supply.
Another factor is existing reserves. Before the conflict, the global market was relatively oversupplied, with about 580 million barrels of oil stored in warehouses and tankers, according to JPMorgan.
"You have to remember that before the war, the oil market was generally oversupplied," said Joe Brusuelas, chief economist at RSM US.
"Sometimes it's better to be lucky than good," he added.
The release of strategic reserves and increased supply to the market have helped cushion the blow, but according to JPMorgan, these only cover part of the gap created.
Meanwhile, global demand for oil has fallen sharply. According to JPMorgan, it has fallen by about 4.3 million barrels per day, a bigger drop than during the 2009 financial crisis.
Analysts point out that in some regions, especially in Asia and the Middle East, the decline in demand is also linked to a physical shortage of supply. Industry and consumers are unable to buy products that are not available.
Europe has warned of possible shortages of jet fuel, while in Asia some industries have reduced production due to a lack of raw materials.
According to CNN analysis, the global oil market is being affected by a combination of factors — including stockpiles, logistical constraints and falling demand — that are keeping price increases below initial expectations, despite an unprecedented supply crisis.
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