Goldman Sachs: Gulf Oil Flows Recover But Lag Pre-War Levels by 7M BPD

Goldman Sachs estimated on Thursday that total Gulf oil exports have recovered to roughly 15 million to 16 million barrels per day, a meaningful rebound from March lows but still 7 million to 8 million barrels below pre-war levels. The bank's analysis, derived from two independent methodologies, suggests market participants are adapting to ongoing disruptions through increased dark fleet activity and ship-to-ship transfers. This adaptive behavior, alongside a 2.1% rally in Brent crude on Thursday, illustrates a market balancing gradual supply improvements against a still-unresolved geopolitical backdrop. The bank's continued preference for price upside in European gas and refined products over crude itself signals a view that structural bottlenecks elsewhere may prove more persistent than the crude supply gap.

Context — why this matters now

The Strait of Hormuz carried approximately one-fifth of global seaborne oil and liquefied natural gas supply before the US-Israeli war on Iran began in late February 2026. The waterway's strategic importance makes any disruption a immediate concern for global energy security and pricing. The current recovery follows a severe contraction in March when flows reached their lowest point, with exports plummeting to roughly 10 million barrels per day at the trough. The ongoing conflict has created a persistent risk premium in energy markets, with periodic spikes driven by diplomatic developments and military incidents. The current macro backdrop features elevated volatility across energy commodities, with European natural gas markets showing particular sensitivity to supply disruptions.

Data — what the numbers show

Goldman Sachs' current export estimate of 15-16 million bpd represents a significant recovery from the March trough of approximately 10 million bpd, marking an improvement of 5-6 million bpd. However, this remains substantially below the pre-war export level of 22-23 million bpd, creating a deficit of 7-8 million bpd. The bank suggests Strait of Hormuz transits specifically are likely tracking near the upper end of official US estimates at 8-10 million bpd. This partial recovery coincides with Brent crude trading patterns that show continued volatility, while other energy assets demonstrate varied performance. The adaptation methods cited by Goldman include increased dark fleet activity, where specialized shippers operate with reduced transponder visibility, and a rise in ship-to-ship transfer operations outside monitored zones.

Metric	Pre-War Level	March Trough	Current Level
Gulf Oil Exports (bpd)	22-23M	~10M	15-16M
Deficit/Surplus vs Pre-War	-	-12-13M	-7-8M
Recovery vs Trough	-	-	+5-6M

The market response to these supply dynamics has been mixed across energy sectors. While crude oil has seen volatile but range-bound trading, European natural gas contracts have shown stronger upside momentum on persistent structural concerns. This divergence highlights how different segments of the energy complex are pricing disruption risks differently based on their specific supply-demand fundamentals and storage levels.

Analysis — what it means for markets / sectors / tickers

The adaptation strategies employed by shippers and producers have effectively created a shadow transportation system that mitigates some immediate supply scarcity price effects. This explains why crude prices have not sustained sharper rallies despite the significant export deficit. The greater price upside identified in European natural gas reflects more rigid infrastructure constraints that cannot be easily circumvented through operational workarounds. Longer-dated oil products face similar structural bottlenecks in refining capacity and distribution networks that remain vulnerable to prolonged disruption. This creates a bifurcated trading opportunity where energy sector exposure needs careful calibration across the complex rather than blanket long crude positions.

The bank's view suggests traders should consider positions in UPS ($105.68, +0.51% today), which stands to benefit from continued energy market volatility and transport adaptation needs. Conversely, the analysis implies more challenging fundamentals for pure-play crude exploration companies that might face price ceiling effects from the adaptive recovery in flows. One limitation to this analysis is that it assumes current adaptation methods can continue indefinitely without facing additional regulatory or military challenges. If these workarounds were disrupted, the crude supply gap would immediately reassert itself with significant price implications. Flow data shows money moving into midstream infrastructure and LNG assets rather than upstream producers, confirming the market's focus on bottlenecks rather than wellhead supply.

Outlook — what to watch next

Traders should monitor two near-term catalysts for potential market moves: any official statement from Iran regarding its conditions for reopening Strait of Hormuz transit fully, and the next weekly inventory data from the US Energy Information Administration on August 30. Technical levels for Brent crude remain critical, with resistance near the $85 level and support at $78 representing key inflection points for future direction. European natural gas storage reports due September 2 will provide crucial data on whether structural tightness is building despite current supply adaptations.

The key diplomatic watchpoint remains the US administration's position on reviving the June memorandum of understanding with Iran, following the Wall Street Journal report that President Trump currently opposes returning to those terms. Any shift in this stance would likely trigger immediate repricing across energy markets. Market participants should also monitor shipping insurance rates and tanker freight costs as additional indicators of risk perception in the Gulf region, as these secondary metrics often lead price moves in the underlying commodities.

Frequently Asked Questions

How does the current Gulf export level compare to historical disruptions?

The current deficit of 7-8 million bpd below pre-war levels represents one of the largest sustained supply disruptions in modern history, comparable only to the initial COVID-19 demand collapse in 2020 and the 1990-1991 Gulf War disruptions. However, the adaptive recovery observed differs from historical precedents where supply gaps typically persisted until geopolitical resolution. The current situation shows market participants developing workarounds that partially mitigate the impact while the underlying conflict continues unresolved.

What are dark crossings in oil shipping?

Dark crossings refer to maritime transits where vessels disable or manipulate their Automatic Identification System transponders to avoid detection and tracking. Specialized shippers operating older tankers often employ this method to manage through areas of heightened geopolitical risk or sanctions enforcement. The increase in this activity indicates participants are accepting higher operational risks to maintain revenue flows, though it also creates challenges for accurate supply tracking and insurance coverage.

Why does European natural gas face more persistent bottlenecks than crude oil?

European natural gas infrastructure lacks the flexibility and alternative routing options available for crude oil. Gas depends heavily on pipeline networks and specialized LNG import terminals that cannot be easily rerouted or replaced with shadow fleets. storage capacity limitations and seasonal demand patterns create structural vulnerabilities that supply adaptations cannot quickly address, making price spikes more likely and persistent during disruption periods compared to more fungible crude markets.

Bottom Line

Gulf oil exports remain 7 million barrels per day below pre-war levels despite adaptive recovery efforts, shifting maximum price risk to European gas and refined products.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.