Middle East and Persian Gulf oil exports Report Interpretation

Overview

This Oil Tracker assesses how attacks and shipping disruptions are affecting Middle East oil flows and the global oil balance. Goldman Sachs finds that Saudi Arabia has partly preserved exports through eastern-port rerouting, but worsening infrastructure risks, sizable Gulf production losses and less reliable demand-side buffers have tightened the market.

Core views

Goldman Sachs says Brent crude has risen to nearly $110 after Saudi Arabia closed its 7mb/d East-West pipeline following Thursday's attacks and after a meeting on the future of Hormuz shipping was postponed. The institution considers the attacks on oil infrastructure a meaningful escalation. The direct volume impact and outage duration remain highly uncertain: an April attack reduced East-West pipeline flows by 0.7mb/d for only four days, while current repair assessments range from “very soon” to eight weeks. The latest incident may be more severe and could put the remaining 2mb/d of recent Yanbu exports at risk. Saudi export data show both resilience and vulnerability. Saudi oil exports fell 2.8mb/d month over month in August as Yanbu loadings dropped below 2mb/d, but reported exports recovered over the subsequent two weeks to June averages. Goldman Sachs attributes this recovery largely to reverse redirection of Red Sea flows toward eastern ports. Red Sea exports nevertheless remain 3.3mb/d below their June average: higher reported flows through Suez and the SUMED pipeline offset only 0.3mb/d of the Bab-el-Mandeb decline. In contrast, shipments through Hormuz and other eastern ports increased by 3.3mb/d since June. Yanbu loadings remain around 45% of pre-Houthi-blockade levels on a seven-day moving-average basis. The report estimates that Persian Gulf crude output fell by 1.2mb/d in August from July, implying total production losses of 7.1mb/d based on average external estimates. Saudi production declined amid attacks affecting both eastern and western shipping routes, while the US blockade weighed on Iranian production. Iraqi and UAE output continued to rise, which Goldman Sachs links to growing dark crossings and possible US assistance, but this was insufficient to produce a strong Gulf recovery. The institution therefore believes the global oil market shifted from being nearly balanced in July to a larger deficit in August. Averaging recent external estimates with its visible-stocks draw measure produces an August deficit of around 3mb/d, versus Goldman Sachs' own balance estimate of around 1mb/d. For exports, Goldman Sachs estimates recent total Persian Gulf oil shipments at approximately 16-17mb/d, or around 70% of pre-war levels, while reported visible exports are only 13mb/d on a seven-day moving average. Using its export-flow assessment, it now estimates the net hit to Persian Gulf exports at 6.7mb/d. The analysis uses both shipping-flow data and a country-based definition that includes Saudi Arabia, the UAE, Iran, Iraq, Qatar and Kuwait; it notes that reported Saudi exports could later be revised upward because of dark-crossing activity. Inventory and demand-side cushions remain important to the outlook. OECD commercial inventories are still described as insulated from immediate global tightness, but the report questions the sustainability of the key buffers: OECD strategic petroleum reserve releases and weak Chinese crude imports. Visible OECD crude SPR draws slowed to 0.3mb/d over the prior month, entirely driven by the United States, while Japan and South Korea had begun rebuilding reserves. Initial US SPR-swap terms require borrowed barrels to be returned from November 1, and the US energy secretary indicated SPR refilling could begin in the next few months. China’s crude imports remain about 4mb/d lower year over year, but Goldman Sachs sees scope for some increase because domestic gasoline and diesel inventories are down 9% year over year and high refining margins, together with 0.4mb/d of remaining annual product-export quota capacity, support refined-product exports. The report also tracks Russia as a separate supply variable. A reported agreement not to strike energy targets temporarily pushed European diesel prices 5% lower, though Ukraine subsequently said no deal had been finalized. Russian refinery outages remain 4.6mb/d, keeping refined-product exports 1.1mb/d below year-ago levels, while crude exports have fallen by just over 1mb/d during the last two months after port attacks. Goldman Sachs notes that a hypothetical energy ceasefire could allow Russian oil exports to recover, citing CPC terminal exports—mainly carrying Kazakh crude—which returned to last year's level on a 28-day moving average when attacks ceased and all three moorings resumed operation. Against this backdrop, Goldman Sachs states that infrastructure attacks raise the probability of its upside price scenario, in which Brent exceeds $120 if average Gulf output in 2027 remains 4mb/d below pre-war levels. Market pricing has also moved toward higher prices: the implied probability that the February Brent contract expires above $100/bbl rose 18 percentage points over the past month to 44%.

Analysis framework

The report combines shipping and export-flow tracking with external production estimates, Goldman Sachs oil-balance estimates and visible inventory draws. It compares observed port and route changes with pre-war and June baselines, then evaluates whether production losses, exports, strategic-reserve use and Chinese imports are tightening the global physical balance.

Methodology notes

• Industry AnalysisSupply-demand framework

  Global oil supply-demand balance analysis

  Goldman Sachs combines production-loss estimates and observed inventory draws to infer the size of the global oil deficit and the resulting pressure on oil prices.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Oil-flow and shipping-route transmission analysis

  The report examines how disruptions at pipelines, Red Sea routes, Hormuz and eastern ports translate into export availability, refinery-product flows and the broader oil balance.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Brent crude

  The principal commodity-price benchmark affected by Middle East supply and export disruptions.

  Strengths

  Supply losses and a larger August deficit support the report's upside scenario.

  Weaknesses

  Reported export data may be revised, including for dark crossings.

  Comparison

  The implied probability of a February expiry above $100/bbl rose to 44%, up 18 percentage points over the last month.

  Risks

  A recovery in disrupted flows, including through an energy ceasefire, could ease supply tightness.

Key data

• Brent crude priceNearly $110Following closure of Saudi Arabia's 7mb/d East-West pipeline after attacks.
• Net hit to Persian Gulf exports6.7mb/dGoldman Sachs' current estimate.
• Recent Persian Gulf oil exports16-17mb/dAround 70% of pre-war levels; visible exports were 13mb/d on a 7-day moving average.
• August Gulf crude production losses7.1mb/dAverage of external estimates.
• August global oil deficitAround 3mb/dBased on average external estimates and Goldman Sachs visible-stocks draws; Goldman Sachs' own balance estimate was around 1mb/d.
• Saudi Red Sea export shortfall3.3mb/d below the June averageOnly 0.3mb/d of the Bab-el-Mandeb decline was offset by reported Suez and SUMED flows.
• OECD crude SPR draw rate0.3mb/dOver the last month, with the United States accounting for all draws.
• China crude-import changeAround 4mb/d lower year over yearChina gasoline and diesel inventories were down 9% year over year.
• Russia refinery outages4.6mb/dRussian refined-product exports remained 1.1mb/d below year-ago levels.
• Probability of February Brent expiring above $100/bbl44%Up 18 percentage points over the last month.

Impact & implications

The report says that rerouting has so far limited the decline in Saudi exports, but it has increased reliance on eastern routes while Red Sea capacity remains impaired. Continued Gulf production and export losses, together with slower SPR releases and potentially firmer Chinese imports, would deepen the physical oil deficit and strengthen the report's upside Brent scenario.

Risks

• The volume affected by the East-West pipeline outage and the duration of repairs are highly uncertain, with assessments ranging from very soon to eight weeks.
• The latest attack could threaten the remaining 2mb/d of recent Yanbu exports.
• Reported Saudi export data may be revised because of potential dark crossings.
• The durability of OECD SPR releases and weak Chinese crude imports as market buffers is uncertain.
• A hypothetical energy ceasefire could support a recovery in Russian oil exports.