The oil market is adapting faster than expected
The Strait of Hormuz was supposed to be the pressure point that kept crude prices elevated as the Iran conflict dragged on.
Instead, more oil is getting through.
Goldman Sachs estimates that total crude and oil-product exports through the strait have recovered to around 15–16 million barrels per day, up sharply from just 5–6 million barrels per day at the March low.
Flows remain roughly 7–8 million barrels below pre-war levels, but the recovery has been large enough to take pressure off the crude market. Oil prices have fallen toward $89 a barrel, well below the $120-plus levels reached in April.
Our thesis is straightforward: the market is no longer pricing the conflict based only on disruption. It is pricing how well the system can work around it.
Dark shipping is changing the equation
Part of the recovery is happening outside normal tracking channels.
Tankers are increasingly making “dark” crossings by switching off satellite transponders, while ship-to-ship transfers are helping move barrels without relying on the usual routes and reporting patterns.
Goldman believes those workarounds could limit crude-price upside even if the conflict lasts longer than expected.
That matters because the original bullish oil thesis relied heavily on physical barrels being trapped inside the Persian Gulf. If producers can keep exporting through alternative shipping practices, a geopolitical disruption does not automatically become a global supply shortage.
We are watching three things:
- Whether Hormuz flows can hold near 15–16 million barrels per day
- Whether dark crossings and ship-to-ship transfers keep expanding
- Whether the conflict begins hitting production itself, rather than mainly transportation
The third point is the one that would change our view fastest. Shipping can adapt. Destroyed production capacity is much harder to replace.
Crude may no longer be the most interesting part of the trade
Goldman also pointed to a gap developing between crude and other energy markets.
LNG and refined-product flows remain weaker, and the bank sees more upside risk in European natural gas prices and deferred oil products if disruptions continue.
We think that distinction matters.
Crude is relatively flexible. Barrels can be rerouted, stored, transferred offshore and sold into different markets. LNG and refined fuels depend on more specialized infrastructure and shipping capacity, making disruptions harder to work around quickly.
The trade may therefore be becoming more selective.
Instead of simply buying crude every time tensions rise, we think the better opportunities could emerge where the conflict is creating real physical shortages that shipping workarounds cannot easily solve.
Our view: the war premium is narrowing, not disappearing
Hormuz is still one of the most important energy chokepoints in the world, and another escalation could send prices sharply higher.
But the current data argues against assuming a prolonged conflict automatically means $120-plus crude.
The energy system has adjusted. More barrels are moving. The market knows it.
For now, we are less interested in chasing crude on geopolitical headlines alone and more focused on where supply remains genuinely constrained.
If Hormuz flows hold near current levels, crude’s war premium could keep fading.
If those flows collapse again — or production itself gets hit — the oil trade changes very quickly.
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