Oil and Natural Gas Markets Navigate Geopolitical Strain and Supply DynamicsThe oil markets remain in Persian Gulf crisis territory as of June 12, 2026.
The Strait of Hormuz remains effectively closed, with Middle East crude shipments down significantly.
Consequently, Middle East oil production remains down over 11 million barrels per day versus the prewar period in May.
The global oil market has seen steep drawdowns in total oil inventory (including crude and refined products) under current expectations.
For example, the OECD’s crude oil inventory levels are heading toward their lowest since 2003 under current market expectations.
Oil and Natural Gas Markets Navigate Geopolitical Strain and Supply Dynamics
The oil markets remain in Persian Gulf crisis territory as of June 12, 2026. The Strait of Hormuz remains effectively closed, with Middle East crude shipments down significantly. Consequently, Middle East oil production remains down over 11 million barrels per day versus the prewar period in May.
The global oil market has seen steep drawdowns in total oil inventory (including crude and refined products) under current expectations. For example, the OECD’s crude oil inventory levels are heading toward their lowest since 2003 under current market expectations. With ceasefire talks ongoing between the U.S. and Iran, crude oil prices are now more volatile, with limited maritime traffic in the region and ongoing strikes (which have demonstrated the fragility of any potential ceasefire agreement) keeping a lid on earlier rallies.
