Risk Premium Keeps Oil Prices Elevated Despite Export Recovery
Oil futures remain high despite a significant recovery in Middle East exports, according to Goldman Sachs analyst Yulia Zhestkova Grigsby. The bank estimates that Gulf oil exports have returned to last year's levels, reaching 23.3 million barrels per day over the past week, which is in line with the 2025 average.
This recovery came despite an attack on the Saudi East-West pipeline and the Houthi blockade of Saudi exports through the Bab al-Mandab strait. However, higher shipments through the Strait of Hormuz, including ship-to-ship transfers, drove the rebound.
Saudi exports more than doubled in September to 11.6 million barrels per day, while the UAE also exported above its 2025 average. Satellite data showed no seaborne crude or main refined product exports from Iran during the month.
The global oil market was roughly balanced in September, and Goldman expects it to moderate to $85 a barrel by year-end and $80 in 2027. However, physical prices such as dated Brent remain near $120 a barrel due to a large risk premium, which reflects downside risks to supply from escalation threatening long-term oil production.