The Hormuz Rebound Is Why Physical Brent Stays High

Goldman Sachs put Persian Gulf oil exports, including dark cargoes, at 23.3 million barrels a day in the week covered by its Sept. 29 note, in line with the 2025 average. Oil futures have already given back some of the war spike, but the U.S. Energy Information Administration still printed Europe Brent at $113.96 a barrel on Sept. 29, with Cushing WTI at $96.16.

The barrels came back through the Strait of Hormuz and ship-to-ship transfers after Saudi Arabia’s Red Sea bypass was hit. That is a recovery that still has to be insured, stored, and refined.

Last Week’s 23.3 Million Barrels Came With an Asterisk

Yulia Zhestkova Grigsby and colleagues at Goldman Sachs said Gulf shipments doubled across September and that crude did almost all of the work. Estimated crude exports made up nearly 90 percent of the month’s rebound and reached 19 million barrels a day over that latest week, or 108 percent of their 2025 average.

The 23.3 million total includes so-called dark exports, cargoes moved by tankers that switch off location transponders, plus ship-to-ship transfers in waters that are harder to intercept. In the first weeks of the war that began with U.S. and Israeli strikes on Iran on Feb. 28, Goldman had Gulf exports below 10 million barrels a day. By late August the same desk was still around 15 million to 16 million, or 7 million to 8 million below pre-war levels.

JPMorgan’s commodity team, including Natasha Kaneva, published a parallel Sept. 29 note with a lower crude count and a much weaker fuels print. The two banks are not measuring the same basket, and they should not be averaged.

HOW THE FLOW COUNTS DIFFER

Kaneva’s note called the rebound “a remarkable recovery for a region still at war,” then drew the line the physical market is still drawing. Higher crossings, the team wrote, should not be mistaken for improved safety, because they show the industry learning to operate under sustained risk.

U.S. Treasury Secretary Scott Bessent has said 17 million barrels a day “sometimes” moved through Hormuz. TotalEnergies chief executive Patrick Pouyanné has put crude and products getting out at 10 million. Visible trackers sit in that lower band. Goldman’s extra barrels are the dark fleet and the STS legs that those screens miss.

The Rebound Ran Straight Through Hormuz

Goldman said increased Hormuz loadings, including ship-to-ship transfers, drove the September recovery even after an attack on the Saudi East-West pipeline disrupted flows to Yanbu for nearly two weeks and even as Houthis kept blocking Saudi cargoes through Bab al-Mandab. The workaround became the main road.

The International Energy Agency’s August snapshot is the last full-month official cut. In a Sept. 18 note, oil markets head Toril Bosoni wrote that Hormuz averaged only 7.6 million barrels a day that month, 13.1 million below pre-war levels, with cumulative export losses via the waterway approaching 2.8 billion barrels. JPMorgan later said Hormuz flows had almost returned to late-June highs of nearly 13 million barrels a day, led by Saudi Arabia.

Ship-to-Ship Transfers and Dark Sailings

Ship-to-ship transfers let a Gulf loader pass crude to another hull in international waters, which is harder to hit and harder to count. Dark sailings do the same job by going quiet on AIS. Both raise the headline export number without raising the share of barrels that a satellite or a commercial tracker can swear to. The recovery is real in the sense that more oil is leaving. It is also a thinner kind of real, because the next strike on a pump station or a convoy does not need to find every ship, only the corridor.

The East-West Pipeline Took a Hit

Saudi Arabia spent the spring and early summer pushing crude west on the East-West line to Yanbu, then south through the Red Sea, after Hormuz seized up. IEA figures based on Kpler show those Hormuz-bypass loadings, Yanbu plus the UAE’s Fujairah route, rising from 4.1 million barrels a day in February to 7.8 million in June, then slipping to 5.5 million in August after Houthi attacks in the Red Sea. The IEA said those bypass routes had offset more than 500 million barrels, or 2.8 million barrels a day, of Hormuz losses from the start of the war through August.

On Sept. 10, drones launched from Iraqi territory hit the line. Loadings at Yanbu stopped. JPMorgan said Saudi Arabia had since restored about half the pipeline’s flows. Rice University’s Baker Institute, in a Sept. 25 working paper by Kristian Coates Ulrichsen, Jim Krane and Ana Martín Gil, framed the summer as the war widening from Hormuz onto Houthi pressure on the Red Sea bypass, the very outlet built to make Hormuz optional. When that outlet failed, the extra Saudi barrels went back into the contested Gulf.

THE BYPASS THAT FORCED THE RETURN TO HORMUZ

1. February 28, 2026: U.S. and Israeli strikes on Iran open the war and choke Hormuz traffic.
2. March 11, 2026: IEA members announce a collective emergency-stock release that later exceeds 300 million barrels.
3. July 20, 2026: Houthis declare a blockade on Saudi shipments through Bab al-Mandab.
4. September 10, 2026: Drones hit the East-West pipeline; Yanbu crude loadings halt.
5. September 29, 2026: Goldman’s note puts Gulf exports, including dark cargoes, back at 23.3 million barrels a day via Hormuz and ship-to-ship legs.

Qatar’s second-quarter hydrocarbon export revenue was down 97 percent from a year earlier, the Baker paper noted, a reminder that a barrel leaving the Gulf on a dark tanker is not the same as a normal export year for the states that sell it.

Refined Fuels Are Still at Half Their Usual Pace

The crude barrel came home faster than the diesel barrel. Goldman said diesel, gasoline and jet fuel remained at about 50 percent of their 2025 average, with refinery outages and shipping risk still in the way. JPMorgan’s 3 million barrels a day of products, 58 percent of pre-war, is the same split with a different ruler.

That split is what a full-recovery headline keeps tripping over. Crude can sit in a hull, transfer at sea, and still be a crude problem for a refiner who cannot get diesel out of Ras Tanura or Yanbu. People looking at empty fuel racks are not wrong to ask where the 23.3 million barrels went. A lot of them never became road fuel.

The IEA’s August numbers, issued in its September Oil Market Report on Oct. 1, show how wide that fuels gap still was before Goldman’s latest week. Total Gulf oil exports were about 13 million barrels a day, nearly half the pre-war level. Crude losses had narrowed to just below 45 percent, helped by bypass routes and U.S. military escorts in Hormuz. Refined product and LPG exports were still nearly 60 percent, or 3.7 million barrels a day, below February. Net Gulf diesel and gasoil exports averaged 390,000 barrels a day, just over a quarter of pre-war.

WHAT STILL HAS NOT COME BACK

• Iran’s seaborne barrel: Satellite reads showed no seaborne crude or main refined-product exports from Iran in September, Goldman said, against a U.S. blockade of Iranian ports.
• Gulf diesel and gasoil: Net exports were 390,000 barrels a day in August, just over a quarter of the pre-war rate, per the IEA.
• Product and LPG cargoes: Still 3.7 million barrels a day below February in the IEA’s August cut, even as crude losses narrowed.
• The East-West relief valve: JPMorgan put the repaired line at about half of its prior flows after the Sept. 10 strikes.

Diesel is where the squeeze still shows on a screen. The IEA said U.S. diesel and gasoil prices surpassed $200 a barrel in early September, 94 percent above pre-war levels, with Europe and Asia close behind. The EIA’s New York Harbor ultra-low-sulfur diesel print was still $4.999 a gallon on Sept. 29. Atlantic Basin refining margins hit records in August on those cracks. The crude market can look balanced while the fuels market is not.

Saudi Shipments Doubled After the Red Sea Bypass Failed

Goldman flagged a split inside the Gulf itself. Iranian exports fell. Other producers rose. Estimated Saudi exports more than doubled in September to 11.6 million barrels a day and moved above their 2025 average. The UAE also shipped above its 2025 average, the note said, without giving a figure.

That Saudi jump is the Hormuz story in one country. After the East-West line and Bab al-Mandab stopped being a clean way out, the kingdom put more crude back on the waterway it had spent a generation trying not to need. JPMorgan’s Hormuz rebound “led primarily by Saudi Arabia” is the same shift. The swing supplier still swung. It swung into the strait.

Baker’s roundtable put the cost in institutional language: Saudi Arabia’s usual spare-capacity role could not balance the market while the conflict kept spreading. Spare capacity that cannot sail is not spare. A 11.6 million barrel Saudi export month is a lot of oil. It is also a lot of oil pointed at one chokepoint, on hulls that sometimes go dark, while Iran ships nothing seaborne and the Houthis sit on the old escape hatch.

A 507 Million Barrel Hole Is Still Being Filled

Goldman told clients the global oil market was roughly balanced in September. That balance is a high-price one. The bank said the large risk premium in physical grades such as dated Brent, which it described as still near $120 a barrel, reflected two things: downside risks to supply from an escalation that could threaten long-term production, and record-low global stocks excluding OECD commercial inventories, which created a rush to rebuild those stocks while the war risk stayed live.

The IEA’s observed-stock ledger is the hard version of that second point. Global observed oil inventories plunged by a further 95 million barrels in August, taking the draw since February to 507 million barrels, or 2.8 million barrels a day. Oil on the water fell 65 million barrels as Gulf traffic came under new attacks. Non-OECD stocks dropped 52 million barrels, led by China. OECD stocks rose 23 million barrels, because commercial tanks filled enough to more than offset a 19 million barrel drop in government stocks.

That OECD commercial build is why Goldman can say stocks look less ugly if you stare only at rich-world commercial tanks, and still call the global pile, ex those tanks, a record low. IEA members had already released more than 300 million barrels of emergency stocks after the March 11 collective action. Non-OECD crude accounted for 105 million barrels of the total decline, 65 percent of it from above-ground tanks in China, the rest largely from less oil on the water.

THE STOCK DRAW THE FUTURES CURVE IS TRYING TO LOOK PAST

• 507 million barrels: Observed global oil stocks lost since February, equal to 2.8 million barrels a day, the IEA says.
• 95 million barrels: The August drop alone, or 3.1 million barrels a day, with 65 million of it oil on the water.
• More than 300 million barrels: Emergency stocks IEA members have released since March 11.
• $4.999 a gallon: New York Harbor diesel on Sept. 29, while Europe Brent still printed $113.96.

Demand has already done part of the balancing. The IEA now sees world oil demand falling 2.5 million barrels a day in 2026, a steeper cut than in its August report, with the Middle East and Asia taking 80 percent of the loss. Chinese seaborne crude imports had slumped from 11.5 million barrels a day in February to 6 million in June. A market can be “balanced” in September because factories and trucks used less, not because the missing Gulf barrel was replaced for good.

Goldman Still Sees Brent at $85 by Year-End

The bank’s base case is that Brent moderates to $85 a barrel by year-end and $80 in 2027, on Middle East supply adapting and Chinese import demand staying price-sensitive. Against the EIA’s $113.96 Europe Brent print on Sept. 29, that is a $29 gap. Dated Brent in Goldman’s own wording was still near $120 when the note went out. The paper market is being asked to take the $85 path. The physical market is still paying the insurance.

The large risk premium likely reflects 1) downside risks to supply from escalation threatening long-term oil production, 2) record low global stocks (excluding OECD commercial stocks) and hence the desire to rebuild stocks quickly given escalation risks.

Yulia Zhestkova Grigsby, Goldman Sachs commodities research, Sept. 29 note

North Sea Dated, in the IEA’s ledger, averaged $91.00 in August, then jumped to $113.48 on Sept. 9. ICE Brent was at $105 when that report was written, up $21 from the start of August and 45 percent above pre-war. Backwardation went extreme as buyers chased Atlantic Basin barrels and tanker rates rose with the security bill. That curve is the stock-rebuild bid in prices: pay up for oil you can touch now, because the 507 million barrel hole is real and the next interruption is not theoretical.

The Middle East’s oil export arteries are flowing again.

Natasha Kaneva, JPMorgan head of global commodities strategy, Sept. 29 note

They are flowing through a strait that averaged 7.6 million barrels a day in August, on hulls that sometimes go dark, after the pipeline built to avoid that strait was hit, while Iran’s seaborne line sits at zero and diesel is still half a market. Goldman can mark September as balanced and still be right about the daily barrel. The $29 left in physical Brent is the bill for putting those barrels back on the route that can take them away again.

Disclaimer: This article is news reporting and analysis of oil-market estimates, official price prints and inventory data. It is for information only and is not investment advice, a recommendation to buy or sell crude, fuels, futures or energy shares, or a forecast you should trade on. Speak with a licensed financial adviser or commodities broker who can judge your own objectives and risk limits before you act. The figures and statuses here reflect the Goldman Sachs and JPMorgan notes dated Sept. 29, EIA spot prices through Sept. 29, and the IEA’s September Oil Market Report issued on Oct. 1, and all of them can change with the next cargo, print or strike.