Brent Crude Drops to $97 as Gulf Exports Near Pre-War Levels

Key points

• Brent crude traded at $97.36 and WTI at $89.57 on October 1, down from over $103 and $90 respectively the previous day.
• Goldman Sachs reported Middle East oil flows at 23.3 million barrels daily, matching the 2025 average, while JPMorgan estimated Hormuz exports at 98% of pre-war levels.
• Saudi Arabia’s exports more than doubled in September, exceeding the previous year’s average, offsetting declines in Iranian exports.
• Iranian attacks on tankers in the Strait of Hormuz, reported by Lloyd’s List and UK Maritime Trade Operations, failed to move prices significantly.
• Global oil inventories have fallen by approximately 2 billion barrels since the start of the Iran conflict, according to JPMorgan.
• Refined product flows from the Middle East remain at 58% of pre-war levels, keeping diesel prices above $6 per gallon.

Background

Oil prices have been volatile since early September 2026, spiking to $109 on September 10 amid Gulf disruptions and falling below $100 on September 21 as diplomatic signals emerged. Prior to the current drop, Brent had hovered above $100 for much of September, driven by supply fears and high fuel costs. The market has relied on military-escorted shuttles and pipeline diversions to maintain flows, but analysts warn that global inventories are nearing operational lows.

How outlets are covering it

OilPrice.com emphasizes the rapid recovery in Gulf oil flows, citing Goldman Sachs, JPMorgan, and Kpler data to argue that the market is stabilizing despite security risks. CNN, however, highlights the unsustainability of the current situation, noting that while crude flows have recovered, refined product flows remain constrained and global inventories are critically low. CNN also points out that Iran is losing leverage but is ramping up tanker attacks to regain influence, creating a fragile equilibrium that may not last. The two outlets agree on the current price drop but differ on the long-term viability of the supply chain, with CNN stressing the risk of a future price spike if inventories deplete further.

Why it matters

The drop in oil prices offers temporary relief to consumers and businesses facing record-high fuel costs, but the underlying supply chain remains fragile. With global inventories at operational lows and refined product flows still constrained, any further disruption could trigger a sharp price increase. The situation also highlights the growing role of military intervention in maintaining energy flows, raising questions about the long-term sustainability of the current market equilibrium.

What to watch

Analysts will monitor whether the current recovery in Gulf oil flows can be sustained, particularly as Iran continues to attack tankers in the Strait of Hormuz. JPMorgan’s Natasha Kaneva has noted that the market lacks a clear baseline for the endgame, suggesting that prices could remain volatile. Investors will also watch for signs of a peace deal or further diplomatic progress, which could impact oil prices more than physical barrels in the short term.