Crude flows through the Strait of Hormuz hit 14 million barrels per day last week according to Vortexa, a six-month high. JPMorgan puts Middle East crude shipments at around 17.5 million barrels per day, equivalent to roughly 98% of pre-war levels. Kpler data for September 27 to 29 showed flows ranging between 19.5 and 22.5 million barrels daily, briefly exceeding pre-war volumes on some days.
Brent closed Friday at around $102.59 a barrel. It has not fallen below $100 since the flows recovered.
This is the puzzle the oil market is sitting with right now. Volume is back. Prices aren't falling. Understanding why tells you more about where energy markets are heading than the headline flow numbers do.
What came back and what didn't
The crude flow recovery is real but lopsided. Kpler estimates that refined product flows through Hormuz are still only about half of pre-war levels. Diesel and jet fuel are the constraint. Refining capacity inside the region was damaged during the conflict and hasn't fully recovered. Getting crude out of the Gulf doesn't solve the problem if the refineries that turn it into usable fuel are running at reduced capacity.
The mechanism for getting crude through has also changed the economics. Most oil shipments out of the Persian Gulf now require ship-to-ship transfers in calmer waters off Oman's coast. Freight rates for tankers have risen roughly twentyfold since the start of the war and at times reached $1 million a day. Shipbrokers told the Wall Street Journal that each shuttle round trip costs $30 to $40 million before insurance. An Energy Aspects analyst estimated these transfers add $30 to $40 to every incremental barrel.
To get traders into the game at all, Persian Gulf producers have to discount their crude by $20 to $30 below market levels. So spot trading at $100 plus reflects that discount structure plus the elevated transport cost, not a genuine recovery to pre-war pricing conditions.
The risk premium that isn't going away
On October 4, a fourth tanker was struck in Hormuz. Attacks on tankers and Saudi infrastructure haven't stopped just because volume has partially recovered. Insurance underwriters know this. War risk premiums for a single transit on a $100 million tanker range from $3 to $10 million, before cargo cover and freight costs are added.
That premium was already visible when Brent stayed above $100 after the Saudi East-West pipeline shutdown in September removed the main alternative export route. The pipeline is back online but the market is not treating restored volume as a reason to relax. It's treating it as a reason to track each tanker strike individually.
Reuters' September poll put the average 2026 Brent forecast at $89.05, up from $85.08 in August. Several analysts surveyed no longer expect a full restoration of Hormuz traffic. HSBC is basing its forecast on what it describes as a "structurally impaired" Hormuz, with liquids flows remaining well below pre-war levels on a sustained basis.
The headline number says oil is flowing again. The underlying number says it's flowing at a cost that keeps prices elevated regardless of volume. That distinction matters a lot for anyone modelling where energy prices go from here.