Oil Prices Remain Below $100 Amid US‑Iran Tensions and Gulf Export Disruptions
Brent crude hovers around $95 a barrel despite reduced shipments from the Strait of Hormuz, as alternative routes and non‑OPEC output offset supply gaps.
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Sector Effect
Negative · Do not buy
Oil & Gas sector faces lower Brent prices, leading to a bearish outlook; avoid buying related stocks.
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Desk call: Do not buy · Negatively affected
- Oil & GasNegatively affected
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Sectors: Oil & Gas — Negative · Do not buy. PSX tickers: OGDC, PPL. Oil & Gas sector faces lower Brent prices, leading to a bearish outlook; avoid buying related stocks.
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Open on Dawn## Global Oil Market Overview
Brent crude has risen this month but stayed under the $100 a barrel mark, trading near $95. The price ceiling reflects ongoing geopolitical tension between the United States and Iran, which has disrupted Gulf oil exports through the Strait of Hormuz and the Red Sea.
## Export Volumes and Route Shifts
- Middle‑East crude shipments have fallen from about 18 million barrels per day (bpd) pre‑conflict to roughly 11 million bpd now, according to Argus. - In the week before the August 30 flare‑up, flows through Hormuz briefly doubled to 8‑9 million bpd, but have since slipped to below 2 million bpd, with a daily average of 4‑5 million bpd. - No large crude carriers have been observed exiting the strait since September 2, per Kpler data. - During the July US‑Iran peace talks, Hormuz exports briefly returned to pre‑war levels of 16 million bpd. - Gulf producers are using alternative routes, including ship‑to‑ship transfers outside Hormuz, to mitigate the shortfall.
## Key Producer Updates
- Saudi Aramco resumed loading from Ras Tanura in August, though Yanbu exports remain low (1.43 million bpd) due to a Houthi naval blockade. - Egypt’s Sidi Kerir port shipped 2.14 million bpd in August, more than double June volumes. - Iraq exported about 2.34 million bpd in August, while the UAE maintained 2.9 million bpd. - Kuwait recovered to roughly 1 million bpd in July‑August. - Iran’s exports have sharply declined because of the US blockade.
## Non‑OPEC Supply and Demand Trends
- The United States, Canada and Guyana are expected to add a combined 1.4 million bpd this year, partially filling the supply gap. - Russian crude exports held steady at ~5.5 million bpd in July‑August, though the country cut its 2026 output forecast to a 17‑year low. - Global demand for petrochemicals and transport fuels fell to 3.5 million bpd in Q3, down from 4.5 million bpd in Q2, driven largely by China’s shift toward electrification and coal‑based chemicals. - China’s seaborne crude imports dropped to 7 million bpd in July‑August from over 11 million bpd in February, providing market comfort.
## Price Outlook
- Spot premiums have rebounded, with Dubai and Oman futures $19‑$20 above Dubai cash prices for November cargoes. - Argus chief economist David Fyfe noted that physical markets remain “incredibly tight” and diesel prices are at record highs in the United States. - Several banks have raised Brent forecasts: Morgan Stanley now expects an average of $100 a barrel in Q4, while Goldman Sachs lifted its Brent and WTI forecasts by $5 a barrel for 2026‑2027, citing persistent Middle‑East shipping disruptions.
## Implications for Pakistani Markets
The sustained sub‑$100 Brent price limits upside for Pakistan’s oil‑and‑gas companies, whose earnings are closely tied to global crude benchmarks. While alternative supply routes ease the immediate shortage, the overall price environment remains bearish for the sector.