Oil exports from the Persian Gulf have rebounded to approximately two-thirds of pre-war levels, a development that could help maintain oil prices below the $90 mark even amid ongoing conflict, according to Goldman Sachs analysts.
Total crude and oil product exports from the region have reached between 15 million and 16 million barrels per day, as tanker traffic through the crucial Strait of Hormuz has begun to recover. This figure represents a decrease of about 7 million to 8 million barrels per day from pre-war levels, a significant improvement from the 5 million to 6 million barrels per day recorded in March.
Analysts suggest these flows may be sufficient to keep oil prices in the high $70s to low $80s for the remainder of the year. However, they caution that the market has very little capacity for further disruption.
"The market is still running a deficit, in that strategic shocks are still being drawn down. Most of the world’s spare production capacity sits in the region and is still at risk," said Joe Adamski, managing director of ProcureAbility, a supply chain consultancy. "There is no room to absorb another shock. Any serious incident in the Gulf and this conversation shifts again."
Brent crude oil was trading at $88.22 a barrel on Friday, while West Texas Intermediate fell to $83.27 a barrel. Despite these figures, the national average for gasoline remained above $4 per gallon.
Exports through the Strait of Hormuz alone are estimated to account for 8 million to 10 million barrels per day, aligning with U.S. officials' estimates, according to the Goldman Sachs note. Tracking exact shipments can be challenging as tankers often disable satellite transponders, a practice known as "going dark," for safety reasons.
The increase in "dark crossings" by specialized shippers and ship-to-ship transfers indicates that producers and shippers are adapting to the regional conflict. Goldman Sachs noted that higher dark flows could moderate upward pressure on crude oil prices, even if Mideast disruptions persist.
These resurgent exports have contributed to keeping oil prices below the $125 per barrel peak seen in April, and far from the $200 levels discussed earlier in the year, despite the lack of a permanent peace agreement between Washington and Tehran.
Meanwhile, global oil reserves are declining. The U.S. Strategic Petroleum Reserve has fallen below 300 million barrels, its lowest level in over four decades. The U.S. Government Accountability Office has also raised concerns about the operational capability of the emergency energy stockpile due to aging infrastructure.
"We can’t plateau here. Inventories are still draining. If we have a stall or rollback in flows through the Strait, our depleting inventory cushion likely cannot offer sufficient protection to stave off chaos in the months ahead," said Jeff Krimmel, founder of Krimmel Strategy Group, emphasizing the need for sustained export levels.
While crude oil exports have improved, Goldman Sachs also highlighted that flows of liquefied natural gas and refined fuels are encountering difficulties, warning of greater price upside for European natural gas and deferred oil products in persistent disruption scenarios compared to crude oil.