Brent Trapped in Trading Range as Geopolitics Weigh on Oil Prices
The price of Brent crude oil remains trapped in a trading range between $80 and $93 per barrel, despite several factors that would normally justify higher prices. One explanation is that investors are treating each new headline as temporary noise rather than a lasting shift in fundamentals.
Asian imports have risen to 22.82 million bpd in July, the highest level since the outbreak of the Middle East conflict, suggesting alternative routes have been established to meet rising demand. However, shipments through the Strait of Hormuz remain below pre-war levels, and global crude inventories are declining at a slower pace than previously expected.
The Yemeni Houthis' blockade of the Bab el-Mandeb Strait reduced Saudi oil exports to 4.19 million bpd in July, down 460,000 bpd from the previous month. However, crude loadings at the key export terminal in Yanbu rebounded sharply in early August.
A sustained breakout is likely only if US military operations against Iran intensify or Washington and Tehran reach a comprehensive agreement. Until then, Brent is expected to remain in a consolidation phase, trading within an $80-90 per barrel range, according to Goldman Sachs.