Brent Crude Holds Below $100 Amid Middle East Tensions

Despite escalating tensions in the US-Iran conflict and disruptions to energy shipments through the Strait of Hormuz and the Red Sea, global oil benchmark Brent crude has remained below the $100-a-barrel mark.

The sharp reduction in crude shipments from Middle Eastern producers, which have fallen to around 11 million barrels per day (bpd) from approximately 18m bpd before the US-Israeli war on Iran began seven months ago, has not led to a significant increase in oil prices.

Rystad Energy estimates that a substantial volume of crude continues to pass through the Strait of Hormuz, with daily exports averaging around 4-5 million barrels. Although flows have dropped below 2m bpd, industry estimates put current daily exports at between 6-8 million barrels.

The Gulf oil producers are relying on alternative export routes and ship-to-ship transfers outside the Strait of Hormuz to reduce supply disruptions. Higher production from non-Opec producers is also helping to cushion the supply shock, with the United States, Canada, and Guyana expected to increase combined output by around 1.4m bpd this year.