Iraq Exports Still a Million Barrels Short of Pre-War Levels as Hormuz Transits Swing
Physical supply data through early September challenge the net-bearish positioning on WTI crude that has built up since diplomatic headlines cooled the market.
ICE Brent crude front-month held at $105.81 a barrel in early Thursday (2026-09-17) trade, with NYMEX WTI front-month at $101.96, both contracts off less than a quarter of a percent. Steady headline prices mask a physical picture that has shifted less than the prevailing bearish tone suggests.1
The dominant market read has been that Hormuz disruption is manageable. Net bearish signal weight on WTI crude runs roughly double the bullish equivalent across EnergyReader's quantitative tracking. Diplomatic headlines have reinforced that bias: WTI fell more than 5% on Wednesday (2026-05-20) after Trump described negotiations with Iran as being in their final stages, and crude slid more than 3% again on Wednesday (2026-05-27) on ceasefire hopes, PTI reported.2,3 Traders learned to sell the spikes. But three sets of physical data complicate that lean.
Transit counts through Hormuz swung hard in the first week of September. Six commodity vessels passed through on Wednesday (2026-09-02), down from 11 the previous day and well below the recent 10-day average of around 13, oilprice.com reported.4 A Navy-escorted convoy of roughly 40 vessels carrying about 18 million barrels had transited on Tuesday (2026-09-01), and about 17 million barrels moved through on Monday (2026-08-31). Unofficial daily flows have since been running near 8 million barrels, with pipeline routes bypassing Hormuz contributing another 4 million to 5 million barrels per day.4 The combined figure falls short of normal pre-war throughput through the strait.
Iraq's August export data deepens that picture. Exports recovered to about 2.34 million barrels per day in August, up from roughly 1.35 million barrels per day in July, oilprice.com noted.4 Before the war constrained Hormuz access, Iraq was exporting more than 3.3 million barrels per day. The August figure is less than three-quarters of that baseline. An improvement, but not normalisation.
US domestic data sharpened the demand side simultaneously. The EIA reported a 4.5 million-barrel draw in commercial crude inventories for the week ended August 28, pulling stocks to 424.5 million barrels, far exceeding the small draw analysts had forecast.4 Refineries ran at 98% of capacity that week, the highest utilisation rate since 2018.4 High utilisation absorbing constrained import volumes points toward tighter balances into autumn, not easier ones.
OPEC's production table puts Russia's October quota at 9.949 million barrels per day and Saudi Arabia's at 10.478 million barrels per day.5 Saudi barrels routed to Asian buyers move through Hormuz or via the Abqaiq-Yanbu pipeline to the Red Sea. Dubai crude was at $118.84 a barrel as of early Thursday (2026-09-17), trading well above ICE Brent, a gap suggesting Asian buyers are paying up for whatever volume clears the strait.
Trading Economics global macro models forecast crude at 107.63 USD per barrel by end of quarter.2 That is a narrow premium above Brent's current level, and the forecast predates the early-September Hormuz transit counts and Iraq's incomplete August export figures. If unofficial daily Hormuz flows stay near 8 million barrels and Iraqi exports remain below 3 million barrels per day, the supply shortfall accumulates into fourth-quarter delivery windows in ways the current price does not fully capture.
The bearish case rests on escort arrangements and diplomatic progress stabilising flows. Brent has recovered above $105 each time optimism faded between May and September, a pattern that argues against trusting any single diplomatic headline. Convoy-to-convoy variance, from 18 million barrels on Monday (2026-08-31) to six vessels on Wednesday (2026-09-02), leaves transit predictability well below what term-contracted refiners need. Iraq closing the remaining gap to its pre-war export rate would substantially alter the supply balance. The next EIA weekly inventory report, read against refinery utilisation near an eight-year high, offers the clearest near-term signal of how tight the physical market has become.4