Published on: 2026-08-17
Updated on: 2026-08-17
Tracked shipping through the Strait of Hormuz slowed to a near standstill over the weekend, yet Brent remained below $90 after rising as high as $89.40 on Monday. Kpler recorded five commodity-vessel transits on Saturday and none registered on Sunday, compared with 31 during the previous weekend, although ships can pass without appearing in tracking data when transponders are switched off.
A severely restricted Hormuz has already been part of the market’s base case for months, so a larger price move now requires evidence that fresh disruptions are removing more barrels than already expected.
Kpler recorded five commodity-vessel transits through Hormuz on Saturday and none registered on Sunday, down from 31 during the previous weekend. The slowdown is severe, although EIA data show flows through the strait had already fallen to 4.9 million barrels per day in the second quarter from 21.6 million before the conflict.
Brent rose as much as 1% to $89.40 on Monday and was trading at $89.20 by 02:29 GMT, while WTI reached $82.83. Brent also briefly moved above $90 on August 11 before settling at $88.91, showing that recent supply scares have struggled to establish a higher price range.
The physical oil market remains tight despite Brent staying below $90. The IEA estimates a 1.8 million-barrel-per-day global supply deficit in the third quarter, while observed inventories fell 69 million barrels in July and 410 million barrels between the end of February and July.
Demand is the biggest point of disagreement. The IEA expects global oil use to fall by 1.6 million barrels per day in 2026, while OPEC forecasts growth of about 0.6 million barrels per day, leaving a 2.2 million-barrel-per-day gap between the two outlooks.
Shipping conditions deteriorated again after the UAE said three ADNOC-operated vessels were attacked while transiting Hormuz last week. Kpler subsequently recorded only five commodity-vessel transits on Saturday and none registered on Sunday. At Bab el-Mandeb, another important route for Gulf exports, Kpler recorded 49 commodity-vessel transits over the weekend and no tracked Saudi oil shipments.
EIA estimates crude oil and petroleum liquids moving through the strait averaged just 4.9 million barrels per day in the second quarter, down from 21.6 million barrels per day in the fourth quarter of 2025 before the conflict. Its August forecast already assumes shipments will remain severely constrained throughout August and begin recovering slowly in September.
Monday’s vessel count therefore does not automatically represent another 15 million or 20 million barrels per day disappearing from supply. The larger price reaction would come if the latest slowdown pushes actual exports and production materially below levels already assumed in current forecasts.
Brent climbed as much as 1% to $89.40 on Monday as stalled U.S.-Iran talks and slower Hormuz traffic restored some geopolitical premium. It was trading at $89.20 by 02:29 GMT, while WTI was up to $82.83. Both benchmarks gained more than 5% last week.
Brent had already tested $90 days earlier. It reached that level during August 11 trading before settling 1.4% higher at $88.91. On August 13, Brent fell 2.15% to $87.07 and ended a six-session winning streak as weaker demand expectations and rising U.S. crude stocks offset supply concerns.
The latest Hormuz slowdown has pushed Brent back toward that ceiling without producing a sustained breakout. New shipping headlines are still supporting oil prices, although the market is increasingly reacting to whether each development changes the expected volume or duration of the existing supply loss.
Brent below $90 does not mean the supply disruption has been mild. The IEA estimates 8.3 million barrels per day of Gulf output remained shut in during July, while Gulf exports including bypass routes fell by about 2.1 million barrels per day to 15 million barrels per day.
Inventories are carrying more of the burden. Global observed oil stocks fell by 69 million barrels in July, taking cumulative draws between the end of February and the end of July to 410 million barrels. The IEA now expects a 1.8 million-barrel-per-day global deficit in the third quarter, more than twice the roughly 800,000-barrel-per-day deficit it projected one month earlier.
Alternative pipelines have prevented the Hormuz disruption from becoming a complete Gulf export shutdown. EIA estimates Saudi Arabia’s East-West pipeline and the UAE’s Abu Dhabi pipeline together can provide about 4.7 million barrels per day of capacity to bypass Hormuz. That is only a fraction of normal pre-conflict Hormuz volumes, and the routes remain slower, more expensive and capacity-constrained.
The absence of tracked Saudi oil shipments through Bab el-Mandeb over the latest weekend adds another risk to those workarounds. Bypass infrastructure can soften the loss of Hormuz traffic; it cannot replace the strait at anything close to its normal scale.
Demand offers one explanation for why a tight physical market has not carried Brent decisively above $90, although the size of that weakness is far from settled.
The IEA expects global oil demand to contract by 1.6 million barrels per day in 2026. OPEC’s August report reaches a very different conclusion, forecasting demand to grow by about 0.6 million barrels per day. The resulting 2.2 million-barrel-per-day difference is larger than the IEA’s projected third-quarter supply deficit.
The IEA also links part of its weaker demand outlook directly to the Hormuz disruption. Restricted supply has disrupted international supply chains and reduced product availability, while elevated fuel prices have suppressed consumption. Its forecast therefore describes a feedback loop in which the same supply shock supporting crude prices is also damaging the demand needed to sustain those prices.
OPEC sees much less demand destruction, particularly outside developed economies. The disagreement leaves the market with two very different paths for the remainder of 2026, even before the duration of the Hormuz disruption is known.
No. Kpler recorded no commodity-vessel transit on Sunday, although vessels can cross without appearing in tracking data when their AIS transponders are switched off. EIA has also warned that AIS data around Hormuz have become particularly unreliable since the conflict began.
Brent is the main benchmark for internationally traded seaborne crude, while WTI primarily reflects the U.S. market. Disruptions affecting Gulf exports and international shipping therefore tend to feed more directly into the supply premium attached to Brent.
Yes. Prices could fall if demand weakens further, production and exports recover faster than expected, inventories stabilise or negotiations improve the outlook for shipping. EIA’s current base case already assumes Hormuz remains severely constrained through August while Brent averages around $85 during the third quarter.
A sustained recovery in Hormuz traffic would remove some of the supply premium supporting crude and allow shut-in Gulf production to restart. EIA expects Brent to decline toward an average of $78 in the fourth quarter if traffic and production recover gradually.
A durable move above $100 would require additional supply losses beyond the disruption already reflected in current expectations. Further Gulf production shut-ins, damage to export infrastructure, loss of bypass capacity, deeper disruption at Bab el-Mandeb or evidence that EIA’s expected September recovery in Hormuz flows will not happen would all change the current balance.
The physical market is already tight, with inventories falling and millions of barrels per day of Gulf output still offline. The next major repricing depends on whether conditions become materially worse than that existing baseline. A sustained break above $100 becomes more credible when near-zero ship counts create additional barrel losses beyond those the market already expects.
