Why Oil Is Still Below $100 Despite the US-Iran Conflict and Disrupted Gulf Supplies

Global crude oil markets are facing one of their most serious supply challenges in recent years. Tensions between the United States and Iran have intensified, tanker movements through the Strait of Hormuz have fallen sharply, and attacks near important Gulf and Red Sea energy routes have increased concerns about future supplies.

Despite these developments, Brent crude—the international benchmark for oil prices—has remained below $100 per barrel. It traded close to that level on September 8, 2026, but did not decisively cross the mark. This has raised an important question: why have oil prices not climbed even higher when such a large volume of Middle Eastern supply is at risk?

The answer lies in a combination of continuing exports, alternative shipping arrangements, rising production outside the region and weaker global demand.

Gulf Oil Exports Have Fallen but Not Stopped Completely

Oil shipments from West Asian producers have declined considerably since the conflict disrupted regional trade routes. According to estimates cited by Reuters, the region is currently exporting roughly 11 million barrels per day, compared with about 18 million barrels per day before the conflict escalated.

This represents a major supply reduction, but it is not a total shutdown.

Some oil is still passing through the Strait of Hormuz, one of the world’s most important energy corridors. Before the fighting intensified again on August 30, flows through the strait had recovered to between 8 million and 9 million barrels per day. Shipments subsequently dropped below 2 million barrels on some days, although the moving average reportedly remained around 4 million to 5 million barrels per day.

That continuing movement has prevented the market from pricing in a complete loss of Gulf supplies. Analysts cited in a Reuters assessment of the oil market said this partial flow has helped keep Brent around what the market currently considers a reasonable level near $95.

Producers Are Using Alternative Export Routes

Gulf oil exporters have also found ways to move some cargoes without relying entirely on the Strait of Hormuz. Saudi Arabia, Iraq and other regional producers are using alternative pipelines, terminals and ship-to-ship transfers to keep barrels moving.

Saudi Arabia has diverted supplies through its western export facilities, including the Red Sea port of Yanbu. However, the route has also faced security risks following attacks attributed to Iran-backed Houthi forces.

Preliminary shipping data showed that exports from Yanbu fell to approximately 1.429 million barrels per day in August, a six-month low. The previous three-month average was reported at about 3.9 million barrels per day.

At the same time, shipments from Egypt’s Sidi Kerir terminal reportedly increased to around 2.139 million barrels per day in August—more than double the volume recorded in June. The terminal is connected to the SUMED pipeline and offers an alternative channel for moving Gulf oil toward the Mediterranean.

Iraq also increased exports to approximately 2.34 million barrels per day in August, while shipments from the United Arab Emirates remained close to 2.9 million barrels per day during July and August.

These alternative flows cannot fully replace the capacity normally available through Hormuz, but they have softened the impact of the disruption.

Rising Non-OPEC Production Is Filling Part of the Gap

Another factor holding prices below $100 is higher output from producers outside the Middle East.

Countries such as the United States, Canada and Guyana have expanded their crude production. Their combined supply growth is estimated at around 1.4 million barrels per day. This additional oil gives refiners more sourcing options and reduces the world’s dependence on barrels shipped through the Gulf.

Russia is also continuing to supply major buyers, including India. Russian crude generally reaches India through routes that do not require passage through the Strait of Hormuz. This does not eliminate India’s exposure to higher global oil prices, but diversified sourcing can reduce the immediate pressure created by disruptions in one region.

Weak Demand Is Limiting the Price Increase

Oil prices are determined by demand as well as supply. While Gulf exports have fallen, consumption growth has also weakened, particularly in China, the world’s largest crude importer.

Slower economic activity, greater use of electric vehicles and changes in the petrochemical sector have reduced the pace of Chinese oil-demand growth. China has also accumulated substantial reserves, giving it the ability to rely on stored crude instead of competing aggressively for every available shipment.

When demand is soft, sellers have less power to push prices significantly higher. This helps explain why Brent has remained below $100 even as physical supplies become tighter.

Why Fuel Prices Can Still Remain High

A crude oil price below $100 does not necessarily mean petrol, diesel or aviation fuel will become cheaper immediately. Refined-product markets can behave differently from the crude market.

Limited refining capacity, shipping disruptions, expensive freight and reduced availability of particular fuel grades may keep petrol and diesel prices elevated. Spot-market premiums have already risen in some regions, indicating that buyers are paying more to obtain barrels for immediate delivery.

Retail fuel prices in India also depend on several factors beyond international crude, including the rupee-dollar exchange rate, refining expenses, transportation costs, taxes and the pricing decisions of oil-marketing companies.

Could Brent Still Cross $100?

The possibility remains. Brent moved close to $100 on September 8 as attacks on energy facilities increased concerns about a prolonged conflict. If Hormuz traffic falls further, alternative routes are damaged or global demand strengthens, prices could move above the threshold.

For now, however, continuing Gulf shipments, alternative export channels, additional non-OPEC production and weaker demand—especially from China—are preventing a more dramatic price surge. The market remains tight and volatile, meaning the outlook could change quickly if the security situation worsens.