What Kept Oil Near $100 Despite Gulf Disruptions
Oil supplies from the Middle East have fallen sharply during the U.S.-Iran conflict, yet alternative export routes, additional non-OPEC production and weaker demand helped restrain Brent’s rally in the market snapshot covered by this report.
By Carolina Curiel
Published September 9, 2026
What Readers Should Know
- Middle East crude shipments were reported at about 11 million bpd, down from 18 million bpd before the Iran war.
- Some Gulf barrels continued moving through Hormuz and alternative export routes, reducing the size of the supply shortfall.
- U.S., Canadian and Guyanese output was expected to increase by a combined 1.4 million bpd this year.
- China’s seaborne crude shipments fell sharply, while its large reserves provided an additional buffer.
- Physical crude markets were considerably tighter than benchmark futures suggested, with some prices already above $100 per barrel.
MONTREAL (Oil Monster): Global oil benchmark Brent crude had rallied during the month but remained below $100 per barrel in the market snapshot covered by this report, despite an escalation in the U.S.-Iran conflict that disrupted Gulf exports through the Strait of Hormuz and the Red Sea.
Crude oil shipments from Middle East producers were running at about 11 million barrels per day, down from 18 million bpd before the Iran war began seven months earlier, according to Argus.
Hormuz Flows Helped Limit the Supply Shock
In the week before fighting erupted again on August 30, roughly 8 million to 9 million bpd had been flowing through the Strait of Hormuz, double the previous week’s volume, according to Rystad Energy Chief Economist Claudio Galimberti.
Flows subsequently fell below 2 million bpd, but the daily moving average was still around 4 million to 5 million barrels. Galimberti said that level put Brent at a “fair” price of $95. Industry estimates placed daily exports between 6 million and 8 million barrels.
Kpler data showed no visible very large crude carrier exiting the strait since September 2.
During the interim U.S.-Iran peace agreement in July, Hormuz exports had reached pre-war levels of 16 million bpd.
Gulf Exporters Turned to Alternative Routes
Gulf producers found alternative routes and were expected to continue moving cargoes for ship-to-ship transfers outside Hormuz, offsetting part of the earlier shortfall.
Saudi Aramco resumed loadings from its Ras Tanura port inside the Gulf in August. However, exports from Yanbu in the Red Sea remained under pressure from a naval blockade by the Iran-aligned Yemeni Houthis.
Yanbu exports fell to a six-month low of 1.429 million bpd in August from an average of 3.9 million bpd during the previous three months, provisional Kpler data showed.
Exports from Egypt’s alternative Sidi Kerir port reached 2.139 million bpd in August, more than double June volumes.
Iraq’s exports rebounded to around 2.34 million bpd in August. Shipments from the United Arab Emirates held near 2.9 million bpd in July and August after reaching a record in June.
Kuwaiti crude exports recovered to about 1 million bpd in July and August. Iran’s oil exports, however, fell sharply due to the U.S. blockade.
Non-OPEC Producers Added Supply
Non-OPEC producers including the United States, Canada and Guyana were expected to increase output by a combined 1.4 million bpd this year, according to Rystad Energy founder Jarand Rystad, partly offsetting the Middle East shortfall.
Russian crude exports held near 5.5 million bpd in July and August, below the June peak of 6.4 million bpd but still 23% above February levels.
The increase in exports came as Russian refinery processing fell following damage to plants from Ukrainian attacks, according to Kpler data.
Russia has also downgraded its 2026 oil production forecast to a 17-year low, which could reduce future export volumes.
Weaker Demand Also Restrained Prices
Demand destruction in petrochemicals and transportation fuels remained significant in the third quarter at 3.5 million bpd, compared with 4.5 million bpd in the second quarter, Rystad said.
China accounted for more than half of that decline, reflecting rising transportation electrification and increased use of coal-based chemicals.
China’s seaborne crude shipments fell to 7 million bpd in July and August from more than 11 million bpd in February.
Beijing’s reserves, estimated by Kpler at 1.17 billion barrels, also provided the market with a significant supply cushion.
Physical Oil Markets Were Already Much Tighter
While benchmark Brent remained below $100 in the reported snapshot, physical markets were signaling considerably tighter conditions.
Spot premiums rebounded to April levels, with Dubai and Oman crude trading at premiums of $19 to $20 per barrel above Dubai quotes for November-loading cargoes, Reuters data showed.
Oman futures stood at $104.54 per barrel on Monday, while cash Dubai traded at $105.10.
“At the moment, it's telling us that physically things are incredibly tight,” said David Fyfe, chief economist at Argus.
Fyfe added: “We've already got prices substantially above $100 a barrel and even more important, you've got a diesel market that is screaming shortage.”
The latest U.S.-Iran escalation was expected to reduce Gulf exports further while demand increased as refiners raised diesel production. U.S. diesel prices had reached a record high.
Banks Raised Their Oil Price Forecasts
Several banks raised their Brent forecasts. Morgan Stanley expected Brent to average $100 per barrel during the fourth quarter.
Goldman Sachs raised its Brent and West Texas Intermediate forecasts by $5 per barrel for December 2026 and 2027, citing expectations that Middle East shipping disruptions would continue into next year.
The bank forecast Brent at $85 per barrel and WTI at $80 for December 2026. Its 2027 forecasts were $80 for Brent and $75 for WTI.
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Courtesy: www.reuters.com