The US-Israel war with Iran was predicted to cause the worst energy crisis in history, according to the International Energy Agency.

Around 20% of the world’s liquefied natural gas (LNG) and 25% of its seaborne oil supplies were affected. The impact should have eclipsed the oil shocks of the 1970s.

But despite early panic, the crisis hasn’t been as widespread as anticipated. Oil prices have dropped, even though the Strait of Hormuz hasn’t fully reopened.

Why? Four reasons. First, oil markets are behaving as if the conflict will be over soon. Second, other oil producers have seized the opportunity. Third, demand for oil has fallen. And fourth, nations have been burning through their oil reserves.

Is the crisis over? No. Oil reserves in many countries are now running low. The United States, the world’s top user of oil, is about to enter peak driving season from this weekend. If the Iran war drags on, as seems likely, a true global crisis will be hard to avoid.

1: Oil markets have been subdued

This year’s rise in global LNG prices look like a blip compared with the meteoric rises seen after Russia invaded Ukraine in 2022.

The effect on oil has been more pronounced. Prices of Brent crude futures – the global oil benchmark – have risen 72% since January, from US$61 to around US$105 a........

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