The standoff between the U.S. and Iran remains unresolved, and the oil market is experiencing a structural transformation rather than a temporary shock.

1. The US-Iran war has persisted for nearly six months, with hopes for a diplomatic breakthrough remaining bleak. The temporary ceasefire agreement in June has collapsed, and neither side is willing to compromise on the issues surrounding the Strait of Hormuz, instead intensifying their confrontation. Iran has warned that it will escalate its military actions if diplomacy fails, while Trump has declared that the agreement is "over." 2. Oil prices have stabilized around $90 per barrel, although some panic-driven premium has been given back, prices are still approximately 50% higher than at the start of the year. The market is being forced to accept the new reality that restricted supply may last for months. Iran’s inflation rate in July exceeded 80%, and so far this month, crude oil exports have plummeted from 1.7 million barrels per day in 2025 to just 294,000 barrels per day. The average US gasoline price has risen 29% year-on-year, placing political pressure on Trump as he faces the midterm elections.3. The extent of supply disruption remains highly uncertain. In July, crude and refined oil shipped through the Strait of Hormuz dropped from pre-conflict levels of about 18 million barrels per day to 4.8 million barrels per day; so far in August, it is only about 2 million barrels per day. Gulf oil-producing countries are increasingly reliant on “shadow tankers” that have their tracking systems switched off, making actual supply the greatest unknown in the market.4. The refined oil market is exceptionally tight. In July, global refinery processing fell by nearly 5 million barrels per day year-on-year, US diesel inventories reached their lowest levels for the same period in thirty years, and gasoline inventories are at their lowest since 2012. Global crude inventories dropped by 2.4 million barrels per day in the second quarter, marking the largest quarterly decline in a decade. Freight rates for ultra-large oil tankers from the Middle East to China have soared from about $300,000 per day in early July to $490,000 per day, reflecting shipowners avoiding risks and increased demand for longer-haul transport.5. The longer the stalemate persists, the less it appears to be a temporary shock, and more like a structural reshaping of global oil trade. With unclear supply, depleted inventories, pressured refining capacity, and a lack of viable diplomatic paths to restore Gulf trade, the market is gradually accepting this new reality. What is keeping oil prices elevated may not be battlefield dynamics, but rather a deep awareness of the pattern of prolonged supply disruptions.