August 03, 2026
Chart of the Day
EOA: OPEC Gulf Crude Recovery Interrupted by Bab al-Mandab Supply Cuts
Summary
Figure 1 shows the weekly trend in Gulf OPEC supply since the beginning of 2025. It captures the sharp decline in exports after the Hormuz crisis, the subsequent rebound as oil was diverted through pipelines, the impact of the MOU, its collapse, and the recent Bab al-Mandab disruption, which reduced Saudi exports by about 1.5 mb/d. UAE and Iraqi exports have remained steady. Iranian exports appear to have collapsed, but we believe the data do not reflect reality because many Iranian tankers are not being tracked.
Last week, we addressed whether Saudi Arabia could export up to 6 mb/d through the northern Red Sea and the Suez Canal. Today, we examine what comes next, given that the supply decline remains above 8 mb/d.
Today, WTI crude is trading around $79–80 per barrel, down roughly 5–6% from Friday’s close, while Brent is around $83–84 per barrel, down about 5–7%. The main driver is a reduced geopolitical risk premium after U.S. President Donald Trump called off a planned military strike on Iran over the weekend. He said Iran and other Middle Eastern countries had requested a pause, with talks set to resume Monday aimed at a deal for the immediate and complete reopening of the Strait of Hormuz and an end to Iran’s nuclear threat. Swings of $7–8 per barrel have become the norm as the U.S.-Iran situation shifts between heightened tension and the prospect of a possible solution.
Media claims that part of the decline stems from an “OPEC+ decision to increase production by 188,000 b/d starting in September” are complete nonsense, as we discuss below.
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