WSJ: Iran's ability to disrupt global oil markets weakens as supplies recover

Iran's ability to influence global oil markets is diminishing as crude prices return to pre-conflict levels, exports through the Strait of Hormuz recover, and Gulf producers restore output, according to an analysis by The Wall Street Journal.

The newspaper, citing market analysts, said the rapid recovery in oil supplies is reducing Tehran's capacity to use disruptions in the Strait of Hormuz as leverage over the global economy.

Benchmark oil prices have fallen back to around $70 per barrel following the recent U.S.-Iran conflict, with analysts expecting further declines in the coming months. Investment banks Macquarie and Citigroup forecast that crude could fall to around $60 per barrel.

At the same time, tanker traffic through the Strait of Hormuz has rebounded quickly, while major oil producers in the Persian Gulf have resumed operations at wells that were shut during the conflict.

According to The Wall Street Journal, the main challenge now is rebuilding global oil inventories, a process analysts say could take months or even years.

The report noted that as countries replenish their strategic and commercial oil reserves, Iran will have fewer opportunities to threaten global energy markets by disrupting shipping through the Strait of Hormuz.

Analysts cited by the newspaper said lower oil prices and an unexpected surplus in global supply are likely to accelerate the recovery of global inventories.

By Sabina Mammadli