Why Hasn’t Oil Crossed $100 Despite Middle East Supply Shock?

Brent crude has climbed this month but remains under $100 a barrel even as the U.S.-Iran conflict disrupts shipping through the Strait of Hormuz and Red Sea. Middle East crude shipments have dropped to about 11 million barrels per day, down from 18 million before the war began seven months ago, according to Argus data. In the week before fighting resumed on August 30, flows through Hormuz had actually doubled to 8-9 million bpd. Rystad Energy’s chief economist noted the current moving average of 4-5 million barrels puts Brent’s fair value near $95.

Producers Find Workarounds

Gulf exporters have shifted to alternative routes. Saudi Aramco restarted loadings from Ras Tanura, while Iraq, the UAE and Kuwait have posted export rebounds. Non OPEC growth from the U.S., Canada and Guyana adds further supply cushion.

Weak Demand Adds Pressure

China’s falling seaborne imports and broader demand destruction, especially in petrochemicals, are offsetting supply losses, keeping prices below triple digits despite tight physical markets.