Hormuz Recovery: Unexpected Oil Price Shift and Market Implications

The rebound in crude oil flows through the Strait of Hormuz has kept oil prices below expectations. Goldman Sachs analysts Daan Struyven and Yulia Zhestkova Grigsby assess this as 'less upside risk to crude prices even if Middle East disruptions persist.' - Oil prices have fallen from April's $120/barrel peak to around $89/barrel.

■Crude oil flows through Hormuz are now at 6-8 million barrels/day, up from March's low but still 7-8 million barrels below pre-conflict levels.

■Goldman highlights that 'dark crossings' and 'ship-to-ship transfers' are mitigating upside risks due to increased alternative shipping routes.

European Gas Market Under Pressure - Lower LNG and refined product flows create higher upside risks for European gas prices.

■Refineries and distribution networks are less adaptable to disruptions than crude oil, leading to price differentials.

Economic Impact - The oil price pullback reduced headline inflation by 0.9% (from 2.9% in February to 3.8% in April).

■The Chicago Fed estimates the 2026 oil shock could cut this year's growth by 81-166 basis points.

■Goldman Sachs expects that if Hormuz flows stabilize, energy-driven inflation pressure will ease, potentially reducing pressure on the Fed to hike rates.

Markets must monitor the sustainability of Hormuz flows and the resilience of alternative shipping solutions, as these will shape energy prices and macroeconomic policies for the second half of 2026.