Global oil benchmark Brent crude has rallied this month but stayed below $100 a barrel despite recent escalation in the U.S.-Iran conflict that has disrupted Gulf exports from the Strait of Hormuz and the Red Sea, according to reporting by Florence Tan published by Reuters on September 8, 2026. Crude oil shipments from Middle East producers have declined substantially to approximately 11 million barrels per day from 18 million barrels per day before the Iran war began seven months ago, according to Argus data cited in the article. However, several factors have prevented prices from reaching the $100 threshold despite these significant supply disruptions.
Rystad Energy's Chief Economist Claudio Galimberti noted that significant volumes have continued flowing through the Strait of Hormuz. In the week before fighting resumed on August 30, roughly 8 million to 9 million barrels per day had been flowing through the strait, double the previous week's volume. While flows subsequently fell below 2 million barrels per day, the daily moving average remains around 4 million to 5 million barrels, which Galimberti indicated puts Brent at a fair price of $95.
Industry estimates currently place daily exports between 6 million and 8 million barrels. Gulf exporters have successfully deployed alternative routes and means to mitigate supply shortfalls. Saudi Aramco resumed loadings from its Ras Tanura port inside the Gulf in August, though its exports from Yanbu in the Red Sea remain constrained by a naval blockade by Iran-aligned Yemeni Houthis.
Yanbu exports hit a six-month low of 1.429 million barrels per day in August, down from an average of 3.9 million barrels per day in the previous three months, according to provisional Kpler data. Exports from Egypt's alternative port of Sidi Kerir reached 2.139 million barrels per day in August, more than double June volumes. Iraq's oil exports rebounded in August to around 2.34 million barrels per day, while United Arab Emirates shipments hovered around 2.9 million barrels per day, and Kuwaiti crude exports recovered to about 1 million barrels per day.
Iran's oil exports, however, have fallen sharply due to the U.S. blockade. Non-OPEC producers are stepping up to fill part of the gap. The U.S., Canada and Guyana are set to increase combined output by 1.4 million barrels per day this year, according to Jarand Rystad, founder of Rystad Energy.
Russian crude exports held steady at approximately 5.5 million barrels per day in July and August, down from a June peak of 6.4 million barrels per day but still 23 percent higher than February levels. However, Russia has downgraded its 2026 oil output forecast to a 17-year low. Demand destruction has also played a significant role in moderating prices.
Demand destruction in petrochemicals and transportation fuels remains substantial at 3.5 million barrels per day in the third quarter, down from 4.5 million barrels per day in the second quarter, with China accounting for more than half of that decline due to rising transport electrification and coal-based chemicals, according to Rystad. China, described as the new demand OPEC for its market influence, slashed seaborne crude shipments to 7 million barrels per day in July and August from over 11 million barrels per day in February. Beijing's vast reserves, estimated by Kpler at 1.17 billion barrels, have also provided market comfort.
Physical market indicators, however, tell a different story. Spot premiums have rebounded to April levels with Dubai and Oman at $19 to $20 a barrel above Dubai quotes for cargoes loading in November, according to Reuters data. Oman futures were at $104.54 a barrel on Monday while cash Dubai traded at $105.10 a barrel.
David Fyfe, chief economist at Argus, stated: At the moment, it's telling us that physically things are incredibly tight. 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 diesel market has hit record high prices in the U.S., reaching $5.82 per gallon according to GasBuddy data cited in the article.
Several financial institutions have raised their Brent price forecasts. Morgan Stanley expects prices averaging $100 a barrel in the fourth quarter. Goldman Sachs raised its Brent and West Texas Intermediate forecasts by $5 a barrel for December 2026 and 2027, citing expectations that Middle East shipping disruptions will persist into next year.
Goldman Sachs now forecasts Brent at $85 a barrel and WTI at $80 for December 2026, and 2027 prices at $80 and $75 a barrel, respectively.
Source: reuters.com