The US-Israel conflict with Iran was supposed to be the energy market’s worst nightmare. Iran closed the Strait of Hormuz on March 4, choking off roughly 20% of global seaborne oil trade. The International Energy Agency called it the largest supply shock in its history, with global supply plunging 7.5%. Brent crude rocketed past $120 per barrel.
By mid-July, Brent was trading below $75 per barrel. Bloomberg Originals is now examining why the chaos everyone expected never fully materialized, and the answer has implications that stretch well beyond traditional energy markets and into the world of crypto.
How the oil market absorbed a historic shock
Gulf state oil production dropped by at least 6.7 million barrels per day, with cumulative losses potentially exceeding 10 million barrels daily at their peak. By April 2026, cumulative supply losses were estimated at around 1 billion barrels.
The IEA coordinated emergency stockpile releases from member nations, flooding the market with strategic reserves specifically designed for moments like this. Saudi Arabia and the UAE rerouted exports through alternative pipelines and ports, bypassing the Hormuz bottleneck. And temporary sanctions waivers allowed additional supply to reach global markets through channels that would normally be restricted.
