Iran's Trade Claims Overhyped as Oil Prices Plummet

Oil prices plummeted this week due to increased Persian Gulf exports despite Iran's claims of restricting trade through the Strait of Hormuz. On Friday, West Texas Intermediate (WTI) settled at $83.40 a barrel, down 4.2% for the week, while October Brent closed at $89.31, a weekly decline of 5.4%. The Brent-WTI spread ended near $5.91 a barrel.

Persian Gulf exports have recovered to an estimated 15-16 million barrels daily, according to market reports. This is still below the pre-conflict range of 22-24 million but roughly triple March's 5-6 million trough. The recovery in physical supply has outpaced political rhetoric.

The market remains cautious due to global supply risks and potential disruptions to seaborne crude. However, fundamentals suggest a looser market if disrupted Gulf supply continues returning. OPEC expects global demand to grow 0.6 million barrels daily in 2026, with equal growth from producers outside the OPEC+ cooperation framework.