When the West Asia war started in February and Iran subsequently shut traffic through the Strait of Hormuz, analysts described it as the biggest ever oil shock in the history of capitalism. Oil prices did not support the doomsday predictions. Even in nominal terms, oil barely touched $120 per barrel (it had been higher when the Russia-Ukraine war broke out in 2022) and, in real terms, prices were well below the historic peaks.

In hindsight, we know why this happened. China curtailed its oil purchases and drew down from its strategic reserves. That buffer is unlikely to cushion........

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