Hormuz Clears but Saudi Arabia's Two Backup Export Routes Stay Blocked
Hormuz shipping recovers, but Saudi Arabia's East-West pipeline is shut and Houthis have blockaded the Red Sea bypass Riyadh built when Hormuz closed.
ICE Brent crude front-month was trading at $104.80 a barrel on Thursday (2026-09-17), holding above $100 even as US officials confirmed on Monday (2026-09-14) that Iranian mines had been cleared from the Strait of Hormuz and commercial shipping was recovering. The mine-clearance is the conflict's most significant physical de-escalation. Saudi Arabia's East-West pipeline remains shut, global inventories have continued falling, and Middle Eastern oil export constraints persist. That combination explains why Brent has not corrected toward pre-war levels.8
The price record from late July shows how much geopolitical positioning is embedded in the current level. On Monday (2026-07-27), Brent crude sank more than 8% to below $88 a barrel after Washington and Tehran announced a halt to hostilities following 13 consecutive nights of attacks.5 The week before — the week of July 20 (2026-07-20) — Brent had climbed as high as $102 as the conflict intensified, representing gains of more than 9% in a single week.5 That move from above $102 to below $88 in under a week shows how much of the current price reflects a geopolitical overlay rather than physical balances, and how fast it can unwind on a diplomatic headline alone.5
Saudi Arabia's export architecture has been squeezed from two directions simultaneously. Before the conflict, Riyadh redirected crude away from Hormuz through the Red Sea: a corridor that Rystad Energy's Jorge Leon estimated carried around 2.5 million barrels a day of Saudi oil through Bab el-Mandeb.4 Combined with other Gulf flows, the Red Sea route allowed Saudi Arabia and the UAE to move roughly 6.8 million barrels a day, about half the volume that once transited Hormuz.4 On Monday (2026-07-20), the Houthis declared a naval blockade on Saudi Red Sea ports, threatening more than 4 million barrels a day of Saudi crude that Riyadh had rerouted specifically because Hormuz was disrupted.2 With the East-West pipeline also offline, both of Saudi Arabia's export alternatives to Hormuz are now closed even as the strait partially reopens.8
BMI analysts at Fitch Solutions flagged the broader fragility early. In a report sent to Rigzone on Wednesday (2026-07-15), they warned that the market is more vulnerable to Hormuz disruption now than it was before the February outbreak, with fuel inventories seasonally low and demand conditions pointing upward.1 Brent crude futures reached $100 a barrel on July 23 (2026-07-23) for the first time since late May, rising more than 6% in a session after the Houthis struck two Saudi oil tankers, widening disruption across both the Red Sea and Hormuz simultaneously.3
The August trading data show where price signals diverged from physical reality. Kpler data showed Hormuz tanker crossings fell to just five on Wednesday (2026-08-12) and nine on Thursday (2026-08-13), against a monthly average of 12, but prices were not accelerating higher.7
Traders instead focused on US commercial crude inventories, which built by more than 17.4 million barrels in the week of August 3 (2026-08-03), reinforcing the view that supply had not tightened as quickly as the disruption narrative implied.7 Global inventories have since moved the other way, falling according to Monday's (2026-09-14) data, removing the cushion that gave traders cover to discount the supply story through August.8
BMI's August 3 (2026-08-03) report maintained that a broader diplomatic understanding between Washington and Tehran is achievable but described the outlook as "highly fragile." The analysts pointed to Iran-Oman discussions as evidence that efforts to establish post-conflict Hormuz governance are underway, noting that the future governance of the strait is the central variable for price direction.6 Prior to the conflict, roughly 20% of the world's oil moved through Hormuz.5 How much of that volume returns, and through what governance arrangement, remains unsettled.6
ICE Brent above $104 reflects constraints that the Hormuz mine-clearance alone cannot lift. The clearest near-term price signal is whether Saudi Arabia's East-West pipeline restarts. Its return to service would reopen the overland bypass to the Red Sea that Riyadh lost when Hormuz closed, meaningfully easing the Saudi export pinch even if the Houthi naval blockade on Red Sea ports continues. Without a pipeline restart, Saudi Arabia's export options remain thin, and progress in the Iran-Oman governance talks — or a breakdown in those talks — will set price direction before physical flows can fill the gap.8,6