Oil Price Drop Hides a Real Supply Crunch

Brent crude fell below $80 per barrel even though the Strait of Hormuz—which moves about 20% of global oil—has been largely closed since February. Traders are unwinding the conflict premium they'd priced in, not responding to actual supply relief. Existing stockpiles can cover weeks of disruption. If closure persists through mid-2026 and hits peak demand season, depleted reserves could trigger a genuine shortage.