Supply Disruptions Fail to Push Oil Prices Above $100

Despite recent escalations in the U.S.-Iran conflict and disruptions to Gulf exports through the Strait of Hormuz, oil prices have not surpassed $100 per barrel. According to Argus, crude oil shipments from Middle East producers are currently at about 11 million barrels per day (bpd), down from 18 million bpd before the Iran war began seven months ago.

Rystad Energy's Chief Economist Claudio Galimberti noted that while flows have fallen to below 2 million bpd, the daily moving average is still around 4-5 million barrels. This has led some analysts to believe that Brent crude oil prices are at a 'fair' price of $95.

Gulf producers have found alternative routes and means to send cargoes for ship-to-ship transfers outside of Hormuz, mitigating the shortfall. Saudi Aramco resumed loadings from its Ras Tanura port inside the Gulf in August, although exports from Yanbu in the Red Sea remain under pressure from a naval blockade by the Iran-aligned Yemeni Houthis.

Other producers are stepping up to fill the gap, with non-OPEC countries such as the U.S., Canada, and Guyana set to increase output by 1.4 million bpd this year. Demand destruction in petrochemicals and transportation fuels remains significant, reducing global demand and helping prevent prices from exceeding $100.