Flows of crude oil have increased after a period of disruption linked to hostilities around Iran, but prices have not returned to their pre-conflict levels. Brent crude is trading more than 60 percent above the benchmark seen before the outbreak of violence, even as physical shipments and seaborne movements show signs of normalisation.
Market participants say the persistence of elevated prices reflects a range of factors beyond the short-term picture of flows. Risk premia built up during the period of uncertainty can linger, supported by concerns over spare production capacity, tighter inventories in some regions and the potential for renewed disruptions. At the same time, demand has continued to recover in many parts of the world, tightening balances that were looser earlier in the year.
Other structural and logistical factors are also influencing prices. Refining bottlenecks, regional supply mismatches, higher insurance and shipping costs for some routes, and the inventory strategies of traders and producers can all keep upward pressure on prices even as headline flows rise. Policy decisions by major producing countries, including production plans and export allocations, further shape market expectations about future availability.
The divergence between rising physical flows and firm prices underscores how oil markets price in not just current supply and demand but also expectations and vulnerabilities. For buyers and policymakers, the situation means that improvements in tanker movements and port activity may not immediately translate into cheaper fuels for consumers. Market watchers say a sustained reduction in volatility and a build-up of spare capacity or inventories would be needed to pull prices back toward pre-conflict levels.