2022 Brent crude, the benchmark against which the majority of crude oil is priced, soared above $87 per barrel for the first time since 2014. By early March, after Russia’s invasion of Ukraine, the price had jumped another 50%. The markets were afraid that sanctions on Russia, one of the world’s three largest oil producers, would sharply reduce worldwide supply.
Because of this, the winter of 2022-23 was nothing like as bad for Russian-gas-deprived Europe as had been feared. The continent reduced demand through various measures and increasedimports by more than 50m tonnes, or 66%. Some 44% of that came from America, with customers in Asia selling their contracts to customers in Europe as the ships involved were at sea, re-routing the flow almost in real time.
In 1990 a fall in production of 5m bpd caused by the Iraqi invasion of Kuwait saw prices spike to a once-in-a-decade high—followed, six months later, by an American-led war. In 2019 America offered a token increase in the number of troops it had in the Gulf and some upgrades to their kit. If attacks on Saudi assets had continued or threatened stability, much more would surely have been done. But the American response, or lack of it, was keenly felt.
The current turmoil in the region makes the case. For all its attempted pivot, America remains deeply involved and implicated in the conflict which began with the Hamas atrocities of October 7th. Asia’s major oil consumers are not. They do not share America’s interest in containing Iran, which in 2023 sold more than 90% of its crude to China.