Why didn’t the oil markets go berserk?

A five-month conflict has disrupted the Strait of Hormuz and erased two point six billion barrels of oil from global supplies—a loss equivalent to nearly a month of worldwide crude production. You'd expect oil prices to have skyrocketed. Yet according to analysis published in Pakistan's Dawn, crude has mostly stayed in two digits, defying predictions that prices would hit two hundred dollars per barrel or higher. Three factors have cushioned the shock: Strategic reserves released by wealthy nations, lower demand in Asia, and a dramatic shift in Chinese buying. In the second quarter of twenty twenty-six, China—the world's largest oil importer—cut its crude purchases by roughly a third compared to the previous quarter, importing just eight point one million barrels per day. That restraint has proven critical to market stability. But there's a deeper force at work: electric vehicles. EVs displaced one point four million barrels a day of oil demand in China during the first half of this year. That's nearly triple the displacement from just three years earlier. By June, electric and plug-in hybrids accounted for sixty-three percent of all new vehicle sales in China. Record EV sales have also surged across fifty countries globally, driven partly by the shock of high fuel prices, even as overall automotive sales declined. The oil market's crisis has accelerated a transition that was already underway: a reshaping of global energy demand by electric transportation.

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