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Despite the partial closure of the Strait of Hormuz and supply disruptions during the US-Iran war, crude oil prices in global markets have so far failed to cross the $100-per-barrel mark. However, following fresh attacks by the United State
Despite the partial closure of the Strait of Hormuz and supply disruptions during the US-Iran war, crude oil prices in global markets have so far failed to cross the $100-per-barrel mark. However, following fresh attacks by the United States and Iran on vessels passing through the Strait of Hormuz, concerns have increased over the possibility of prolonged disruptions to global oil supplies.
According to Reuters, Brent crude rose 0.54% on the previous day to $96.80 per barrel. Despite the increase in Brent prices this month, the benchmark remains below $100 per barrel, even as escalating tensions in the Middle East have affected oil exports from Gulf countries through the Strait of Hormuz and the Red Sea. Reuters reported that Argus, an energy-sector data provider, estimates that crude oil shipments from Middle Eastern oil-producing countries currently stand at around 11 million barrels per day, compared with 18 million barrels per day before the war with Iran began. Global economic experts say several factors are helping keep crude oil prices below $100 per barrel.
According to Claudio Galimberti | Rystad, Chief Economist at Rystad Energy, around 8 to 9 million barrels of oil per day were passing through the Strait of Hormuz in the week before fighting resumed on August 30, nearly double the volume recorded the previous week. Although shipments later fell to below 2 million barrels per day, the current daily average remains around 4 to 5 million barrels. Galimberti said that based on the current flow of oil through the strait, a fair price for Brent crude would be around $95 per barrel.
According to the data, there has been no evidence of any major crude oil tanker leaving the Strait of Hormuz since September 2. However, during the temporary ceasefire between the United States and Iran in July, oil shipments through the Strait of Hormuz recovered to pre-war levels of around 16 million barrels per day.
Gulf oil-producing countries have adopted alternative routes and methods to keep their exports flowing. Ship-to-ship oil transfers outside the Strait of Hormuz are also expected to continue, helping to reduce the impact of supply disruptions to some extent. According to the report, Saudi Aramco resumed oil loading in August from the Ras Tanura port in the Gulf. However, exports from the Red Sea port of Yanbu remain under pressure due to a naval blockade by Iran-backed Houthi rebels in Yemen. Oil exports from Yanbu fell to 1.429 million barrels per day in August, compared with an average of 3.9 million barrels per day during the previous three months.
Meanwhile, exports from Egypt’s alternative port of Sidi Kerir increased to 2.139 million barrels per day in August, more than double the level recorded in June. Iraq’s oil exports also rose to around 2.34 million barrels per day in August, while exports from the United Arab Emirates stood at approximately 2.9 million barrels per day in July and August.
Kuwait’s crude oil exports have also recovered to around 1 million barrels per day. However, Iran’s oil exports have declined significantly due to the US blockade.
Non-OPEC countries are also playing an important role in filling the supply gap in global markets. According to Rystad Energy, the United States, Canada and Guyana could collectively increase their oil production by 1.4 million barrels per day this year. Russia’s crude oil exports stood at around 5.5 million barrels per day in July and August, down from a peak of 6.4 million barrels per day in June, but still 23% higher than in February.
A major factor keeping oil prices in check is the decline in global demand. According to Rystad Energy, demand for petrochemicals and transportation fuels fell by around 3.5 million barrels per day in the third quarter of this year, compared with a decline of 4.5 million barrels per day in the second quarter. China, the world’s largest oil importer, saw its seaborne crude oil imports fall to around 7 million barrels per day in July and August, down from more than 11 million barrels per day in February. China’s large oil reserves are also providing some support to the global market. According to Kpler estimates, China has around 1.17 billion barrels of oil in storage.
Although the global benchmark Brent crude remains below $100 per barrel, conditions in the physical oil market are presenting a different picture. According to Reuter’s data, spot premiums have returned to April levels, while prices for Dubai and Oman crude for November loading are $19 to $20 per barrel above Dubai quotes. On Monday, Oman futures were trading at $104.54 per barrel, while cash Dubai stood at $105.10 per barrel.
According to David Fyfe, Chief Economist at Argus, the physical market is currently indicating a severe shortage, while the diesel market is also showing clear signs of tight supply. Experts say the recent tensions between the United States and Iran could further restrict Gulf oil exports, while demand for diesel is expected to increase as refineries boost production.
Meanwhile, amid the crude oil supply crisis in the Middle East, several major banks have issued their forecasts for oil prices. Morgan Stanley has forecast that the average price of Brent crude will be $100 per barrel in the fourth quarter of this year. Meanwhile, Goldman Sachs has raised its forecasts for Brent crude and West Texas Intermediate (WTI) by $5 per barrel for December 2026 and 2027. According to the bank, Brent crude is expected to average $85 per barrel and WTI $80 per barrel in December 2026. For 2027, Brent is forecast to average $80 per barrel, while WTI is expected to average $75 per barrel.
