Gulf oil flows claw back from March trough but remain well under pre-war, Goldman says

The data indicate the market is still significantly undersupplied compared to before the war, even though flows are recovering from the March low. The indication that Hormuz transits may be near the top of the US officials' estimates suggests that producers and shippers have developed workable ways to cope with the ongoing disruption, which could limit further near-term price upside from supply scarcity alone. Goldman's ongoing preference for price upside in European gas and longer-dated oil products over crude itself signals its view that structural bottlenecks in refined and gas markets may be more lasting than the crude supply gap, a distinction traders should consider when positioning across the complex rather than treating oil-linked risk as uniform.

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Earlier:

• Iran preparing list of conditions for Strait of Hormuz reopening, it says
• Oil price snaps losing streak as Trump rules out reviving Iran ceasefire terms

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Goldman's data indicates that Gulf oil exports are recovering, but the market is still far from pre-war levels.

Summary:

• Goldman Sachs estimated total Gulf oil exports at roughly 15 million to 16 million bpd as of Thursday, using two independent methods.
• That figure is 7 million to 8 million bpd under pre-war levels but 5 million to 6 million bpd above the March trough.
• Goldman said the upward revision implies Strait of Hormuz transits are probably near the US officials' estimate of 8 million to 10 million bpd.
• Before the US-Israeli war on Iran started in late February, the Strait of Hormuz carried about one-fifth of the world's daily seaborne oil and LNG supply.
• Goldman attributed some of the recovery to an increase in dark crossings by specialised shippers and more ship-to-ship transfers, calling it proof that producers and shippers are adapting to the conflict.
• The bank still sees more price upside in European natural gas and longer-dated oil product contracts than in crude itself under persistent disruption scenarios.
• Brent crude settled up 2.1% on Thursday, ending a three-session losing streak, after a Wall Street Journal report said Trump was not interested in reviving the June memorandum of understanding with Iran.

On Thursday, Goldman Sachs estimated that total Gulf oil exports have recovered to roughly 15 million to 16 million bpd, according to a Reuters-reported research note, marking a significant rebound from the depths of the conflict even though flows are still well below pre-war norms. The bank's estimates, based on two independent methods, put current exports at 7 million to 8 million bpd below levels before the US-Israeli war on Iran began, but 5 million to 6 million bpd above the March trough.

Although Goldman's headline numbers concentrate on total Gulf flows rather than specifically Strait of Hormuz transits, the bank said the upward revisions indicate that traffic through the strait itself is likely tracking near the range of 8 million to 10 million bpd previously estimated by US officials. That would be a significant, albeit partial, recovery for a waterway that carried about one-fifth of the world's daily seaborne oil and LNG supply before the conflict disrupted normal shipping patterns starting in late February.

Goldman attributed some of the improvement to adaptive behaviour by producers and shippers navigating the ongoing disruption. The note specifically highlighted a rise in dark crossings, which are transits by specialised shippers with reduced transponder visibility, and an increase in ship-to-ship transfers, both of which the bank said show how market participants have adjusted their logistics to keep barrels moving despite the elevated risk in the Gulf.

Beyond the immediate supply recovery, Goldman said it still sees more room for price upside in European natural gas and in longer-dated oil product contracts than in crude prices themselves, under scenarios where Middle East supply disruptions persist. That view indicates the bank sees the more lasting strain from the conflict focused on downstream and adjacent energy markets, rather than on crude oil prices, which have benefited from the adaptive shipping behavior highlighted in the note.

The estimates were released the same day Brent crude settled up 2.1%, ending a three-session losing streak, after a Wall Street Journal report indicated President Donald Trump was not interested in reviving the terms of the June memorandum of understanding with Iran. Taken together, the improving Gulf export figures and the market's reaction to reduced prospects for a near-term diplomatic resolution illustrate the ongoing tension shaping oil markets: gradual, adaptive supply recovery on one hand, and a political and military backdrop that remains far from settled on the other.