The longer the vital oil channel doesn’t reopen, traders say, the more consumption is going to have to recalibrate lower to align with supply that’s dropped at least 10%. And for that to happen, people will have buy less, either through prices they can’t afford, or government intervention to force consumption down.
A billion barrels of supply loss is already all-but guaranteed — more than double the emergency inventories that governments released not long after the conflict began at the end of February. Buffers are being used up fast, helping to keep a lid on oil prices for now. But with the closure now in its ninth week, demand destruction that started in less obvious sectors like petrochemicals in Asia, is quietly spreading to everyday markets the world over.
Link: https://finance.yahoo.com/news/hormuz-billion-barrel-oil-shock-113000076.html