Oil Prices Hold Below $100 Despite Hormuz Disruptions

Oil prices have remained below $100 despite a significant drop in Middle East shipments due to various factors. The Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman, has seen an increase in oil exports since the US-Iran conflict escalated seven months ago.

Rystad Energy's Chief Economist Claudio Galimberti noted that while 8-9 million bpd had been flowing through Hormuz before the recent escalation, flows have since fallen to below 2 million bpd. However, the daily moving average is still around 4-5 million barrels, which puts Brent at a 'fair' price of $95.

Gulf producers have found alternative routes and are expected to continue sending cargoes for ship-to-ship transfers outside of Hormuz. Saudi Aramco has resumed loadings from its Ras Tanura port inside the Gulf, while exports from Yanbu in the Red Sea remain under pressure due to a naval blockade by Yemeni Houthis.

Other producers are stepping up to fill the shortfall, with non-OPEC producers such as the US, Canada, and Guyana set to increase output by 1.4 million bpd this year. Russian crude exports held steady at around 5.5 million bpd in July and August but may reduce due to downgraded 2026 oil output forecast.