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U.S. Export Surge, China Import Cuts Shield Oil Markets From Historic Supply Shock

The United States and China have moved to cushion the impact of a record oil supply disruption, preventing crude prices from reaching levels seen during previous crises. Iran's blockade of the Strait of Hormuz has eliminated roughly 10 million barrels per day of Persian Gulf exports—the largest supply disruption in history and equivalent to 10 percent of global consumption. Yet Brent crude closed Thursday just above $100 per barrel, below prices triggered by smaller disruptions. Non-Middle Eastern producers, led by the U.S., have boosted exports by 5 million bpd. Simultaneously, China—the world's largest oil importer—has reduced purchases by 3.6 million bpd. Combined, the two moves offset approximately 70 percent of lost Gulf exports. Japan, South Korea and India have also cut imports, further stabilizing global markets.