New Delhi, July 16 -- The global oil market successfully absorbed the largest disruption in decades following the outbreak of war in West Asia, though crucial buffers are now running low. A combination of lower demand, increased production outside the Gulf region, and extensive inventory drawdowns prevented a massive price spike after an initial surge, according to an IMF Blog.

Crude prices settled into a relatively stable range of USD 90-100 per barrel despite the effective closure of the Strait of Hormuz.

IMF noted that the global system managed to absorb the shock because supply ran about 2 million barrels a day above demand just before the conflict began. During the March to May period, three main factors closed the remaining gap. D...