Why Brent Still Trades Near $100 Despite Normal Hormuz Oil Flows

Crude is moving through the Strait of Hormuz again at roughly 13.5 million barrels per day, back to its pre-war pace. You might expect cheaper oil to follow. It hasn’t: Brent still trades near $100 a barrel, against about $60 before the war, and the Brent crude price outlook depends far more on that gap than on the tanker counts.

The gap tells you something specific. One kind of market prices barrels. Another prices the safe, affordable delivery of those barrels. Today’s market is the second kind.

That matters if you hold mining or energy exposure. Fuel and freight costs feed straight into producer margins and miners’ operating budgets, and the next test arrives quickly: winter demand, followed by the US midterm elections in early November 2026.

Here is a working framework for judging what would have to change for prices to fall, and where the upside risks sit before then.

Why is oil still near $100 when Hormuz crude flows are back to normal?

The headline sounds like good news. Kpler data cited by CNBC on 30 September put Hormuz crude transits at a seven-day average of 13.5 million b/d, matching the pre-war baseline.

Prices barely noticed. TradingEconomics had Brent at $100.58 on 6 October, up 3.51% over the month and more than 50% year-on-year. Through early October the benchmark has held a band of roughly $100-102.

The first crack in the “flows are back” story is what those flows contain. Crude has recovered. Refined products have not: Kpler figures cited by Ajay Bagga show only 677,000 b/d of products moving through Hormuz, against 3.6 million b/d before the war.

Even the total is disputed. Kpler-based reporting puts crude plus products near 14.2 million b/d, about 80% of pre-war levels, while El País counts tanker transits closer to 17.5 million b/d, or about 98%. Tracking methods differ, so treat any single “recovery” figure with caution.

Xuyi Zhao of Guotai Junan Futures gave the clearest explanation of why prices stay stubborn.

Delivery, not just volume According to Zhao, speaking via Bloomberg, the market is pricing not only how many barrels are loaded but whether they can reach buyers safely, reliably and cheaply.

Futures versus physical barrels

The second crack is wider. SEB‘s Bjarne Schieldrop notes that North Sea grades such as Oseberg and Forties trade around $140 a barrel, while front-month Brent futures sit near $100. Front-month futures are contracts for delivery in the nearest month, and they are the price you see quoted in headlines.

This is why Brent futures understate physical stress: the screen price reflects a standardised contract, while refiners scrambling for prompt cargoes pay whatever it takes to secure delivery.

That $40 gap is the cost of getting real oil to a real refinery now. For you, the lesson is simple: treat $100 as a floor-like reference point, not the full price of physical supply.

How delivery costs, diesel and thin inventories keep a premium in the price

If delivery is what the market is pricing, the next question is what makes delivery so expensive. The answer starts with one concept.

What a risk premium actually is

A risk premium is the extra amount buyers pay above the cost of the commodity itself to compensate for the chance that supply is disrupted. A buffer is the spare supply that can absorb a disruption, mainly inventories in storage and unused production capacity.

When buffers are large, a shock gets soaked up and prices barely move. When they are thin, every threat becomes a potential shortage, and the premium grows.

Your reading of today’s price improves once you separate the geopolitical risk premium from the cost of the commodity itself, because the premium can shrink quickly on de-escalation while the underlying delivery costs stay stubbornly high.

The buffer is thin right now. Global inventories fell sharply this year after stocks were drawn down to ease the worst of the Hormuz disruption in April and May.

Delivery costs pile on top. Shipping charges have hit record levels, and insurers are demanding far more to cover war risk while vessels keep coming under fire near the Strait. Meanwhile, Gulf exporters that have rerouted cargoes through other channels are paying for longer, clumsier trips, which raises the bill for buyers and delays arrival at refineries by several weeks. Exact freight rates, insurance percentages and stock levels have not been published in public reporting, but every one of them points the same way.

Aramco Chief Executive Officer Amin Nasser put the fragility bluntly at the Energy Intelligence Forum in London on Monday.

A thin cushion Nasser said the supply resilience cushion is very thin, that emergency reserves may only cover a winter and cannot fix long-term supply, and that pressure will build until Hormuz fully reopens and confidence returns.

Why diesel is the pinch point

Diesel is where all of this concentrates. Four constraints are squeezing it at once:

• Middle East: fuel exports remain limited, as the Hormuz product figures show.
• Russia: diesel exports are absent because of a Moscow ban.
• China: Beijing is again restricting fuel exports to protect domestic supply.
• Refineries: operators are pushing runs hard to capture record refining margins, leaving little slack if a plant goes offline.

The timing makes it worse. Winter heating and industrial use lift diesel demand just as supply is weakest, and Ajay Bagga has flagged record US diesel prices as a serious threat to the economy.

Read today’s price as fragility, not just scarcity. In a well-stocked market a modest disruption might add a few dollars. In this one, the same event could move prices far further, which is why product flows, freight and stocks matter more for your exposure than headline crude volumes.

Did the G7 stock release fail to cool the market?

Policymakers saw the same fragility and reached for the biggest available lever. Between 2 and 5 October, outlets including RNZ, CNBC, Le Monde, the BBC, Anadolu and Bloomberg reported that G7 countries had agreed to release up to 100 million barrels of crude and diesel from emergency reserves, coordinated through the International Energy Agency (IEA). CNBC noted the move followed pressure from the Trump administration.

The design was telling. A substantial diesel release is front-loaded into the first 20 days, a signal that governments see product scarcity, not crude supply, as the core problem.

The relief lasted about a day:

1. 1 October: Brent dipped below $100, helped by the roll to the December contract.
2. Same day into Friday: prices rebounded to about $102.
3. Early October: Brent held above $100 in Asian trade and settled into a $100-102 range.
4. Release window: four months, running into early 2027.

Scale explains part of the shrug. Spread over four months, 100 million barrels is meaningful but modest against a market missing nearly 3 million b/d of refined products through Hormuz alone.

New barrels or recycled promises?

Schieldrop raised a sharper question. The IEA had already pledged 425 million barrels earlier in the crisis, part of which was never delivered, and it is unclear how much of the G7 volume is genuinely new.

Actual deliveries under that earlier pledge have not been publicly reported. That uncertainty weakens the announcement’s credibility with traders.

The takeaway for you: a stock release buys time, not supply. It can ease diesel stress temporarily, but it barely moves crude benchmarks and leaves buffers lower once it ends, so avoid over-weighting policy headlines.

What would bring Brent down, and where do the winter risks sit?

If emergency barrels cannot break the premium, something broader has to. Fitch Solutions has raised its 2026 Brent forecast to $93 a barrel, which still implies elevated prices.

What would have to change for prices to fall

Saxo Bank‘s Ole Hansen argues that a lasting decline needs wider normalisation. In plain terms, three things must happen together:

1. Better crude supply that holds, not just a good week of tanker data.
2. Recovering product exports, especially diesel through Hormuz.
3. Lower political and financial risk to shipping, which would bring freight and insurance costs down.

Reporting also points to supporting conditions: US-Iran de-escalation, diesel releases that actually land, and softer demand or tighter monetary policy. Anadolu noted that expectations of tighter US policy are adding modest downward pressure. No widely reported bearish case rests on OPEC+ spare capacity or a supply glut, so the downside scenario depends on normalisation, not oversupply.

Where the upside risks sit

The risks are closer and more concrete. Ordered by proximity:

• US midterms, early November: SEB lists possible Iranian attacks before the vote and possible US strikes on Iran afterwards among its key unknowns.
• Diesel policy: Ajay Bagga reports that President Trump is considering a diesel export ban under pressure from Republican lawmakers. This has not been independently confirmed.
• Red Sea: a Houthi attack on Saudi Arabia’s East-West pipeline in September exposed that route, and Bab-el-Mandeb shipping remains vulnerable.
• China: a possible move into a mediator role could cut risk, though timing is unknown.

On balance, the risks lean upward into winter. As a general inference rather than a documented precedent, normalising crude alongside tight products tends to support energy equities while raising volatility, and a sudden policy or demand shift can reverse that quickly.

For readers wanting to see how conflict translates into price swings, our deep-dive into geopolitical tensions and crude oil volatility traces the mechanisms behind sudden regional moves.

Past performance does not guarantee future results. Forecasts and forward-looking statements are speculative and subject to change based on market developments.

Reading the price signal: what to watch before winter sets in

Crude volumes are only one input. Delivery costs, scarce diesel and thin buffers explain why the premium has held, and they will decide when it fades.

Before adjusting your exposure, track four indicators:

• Refined product flows through Hormuz, the clearest test of real normalisation.
• The physical-versus-futures spread, which shows what delivered oil actually costs.
• Diesel stocks and policy moves, including the G7 release and any export curbs.
• Geopolitical developments around early November, when midterm-related risk peaks.

If those signals improve together, a lasting decline becomes plausible. If any one breaks the wrong way, a thin market leaves little room to absorb it, and that asymmetry should shape how you size positions this winter.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.