Energy markets remain complacent despite significant supply shock in Oil & Companies News 22/06/2026 Falling Chinese oil imports offer relief to the oil market for now One wouldn’t think that the oil market is facing an unprecedented supply shock at the moment when looking at price action, with ICE Brent trading below $100/bbl. There has been little to no improvement in energy flows through the Strait of Hormuz and for now there is little sign that we are going to see an imminent resumption in energy flows, with a deal still some way off. This means that the oil market will only continue to tighten and will eventually reach a point where the drawdown of buffers leaves the market increasingly vulnerable to significant upside. From an inventory perspective, we believe that the end of July could be an inflection point for the market if there is no improvement in energy flows from the Persian Gulf. This could see ICE Brent spike to $120-130/bbl, prompting increased pressure to come to a deal, which at least starts to see energy flows normalising. And failing a deal, one can’t rule out the possibility that we get to a point where energy-starved buyers are more willing to pay Iran tolls for safe passage through the Strait of Hormuz. Our base case now assumes that we have to wait for this upward pressure before seeing some sort of deal and/or resumption of flows. Therefore, we are of the view that Strait of Hormuz flows will remain largely inhibited until the end of July. This leaves the market in deficit over the third quarter, which sees Brent averaging $110/bbl over 3Q26, before trending lower in 4Q26 and 2027 and flows recover. There are several factors which have helped to take some pressure off oil markets since the start of the war. First, China has stepped back from the oil market significantly. Crude oil imports in May 2026 fell 3.2m b/d year-on-year to 7.8m b/d – the weakest since October 2017. While China sits on significant inventories, it’s unclear how wil