Shadow tanker flows contain crude prices as Hormuz standoff drags into August
Clandestine shipments estimated at up to 2.9 million barrels per day sit between current prices and the $350 upside one analyst warns the supply data would otherwise imply.
A Montel analyst report published on Thursday (2026-08-20) concluded that undeclared flows through the Strait of Hormuz are the main reason ICE Brent crude front-month stood at $93.24 per barrel as of August 20, rather than rising toward a $350 per barrel level the analyst argues the visible supply shock would otherwise imply.7
The visible picture is stark. Ship traffic at Hormuz fell to a new week-low on Tuesday (2026-08-11), shipping data showed, as vessel owners kept their distance amid heightened security risks and stalled U.S.-Iran negotiations. Before the conflict, some 20 million barrels of oil per day transited the waterway.6
The figure underpinning the analyst's argument comes from JPMorgan, which estimated clandestine flows through the Gulf reached about 2.1 million barrels per day in the final two weeks of May. Separate tracking data cited by Invezz put the range at 2.1 to 2.9 million barrels per day during the same period, with dark transits accounting for more than 65% of actual throughput. Both estimates are inferred from vessel positioning and port arrivals rather than declared cargo data, and carry wide uncertainty.2
Even with that shadow supply running, the physical market has drawn down sharply. Observable global oil stocks fell by a cumulative 246 million barrels between the conflict's outbreak and end-April, including a 129 million-barrel draw in March followed by a 117 million-barrel decline in April — equivalent to about 3.9 million barrels per day, according to OGJ.1
Visible Hormuz flows as of mid-June stood at just 1.3 million barrels per day, Bloomberg data showed, with an additional 1.6 million barrels per day departing the Gulf of Oman on vessels running with transponders switched off. A pipeline alternative was averaging roughly 7.5 million barrels daily. Those partial substitutes have prevented the worst-case supply shock from fully registering in prices. They have also kept crude from returning to pre-war levels.3
The United States and Iran signed a preliminary peace agreement on Wednesday (2026-06-17), with Iran committing to reopen the Strait in exchange for full sanctions relief. Reuters reported at the time that Iranian production and exports could recover in weeks rather than months, given the volume of crude sitting on anchored tankers. But that optimism has not fully materialized. Goldman Sachs analysts warned around the same time that Hormuz traffic might never fully return to pre-war volumes, projecting flows would stabilize at no more than 70% of the roughly 20 million barrels per day that transited before the conflict — about 13 million barrels daily, achievable by end-July in their base case. The August 11 (2026-08-11) traffic data suggest the recovery is stalling short of that target.4,3,6
For Europe, the disruption carries direct supply implications. Around 75% of the continent's jet fuel imports originate from Middle East Gulf refineries, making any renewed deterioration in Strait access an immediate problem for European aviation supply chains, OGJ reported. Global refinery crude runs in 2026 are now expected to average approximately 82 million barrels per day, nearly 1.6 million barrels per day below 2025 levels.1
The bearish case rests on supply. Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management, said in early July that the market was being flooded with crude, comments that came as NYMEX WTI front-month settled below $69 per barrel around July 2 (2026-07-02). ICE Brent front-month has since recovered to $93.24 as of August 20, a rebound that reflects unresolved uncertainty about whether dark-fleet volumes can be sustained as the standoff continues.5
JPMorgan said the pace at which the supply imbalance clears will hinge on a recovery in Chinese buying and the speed at which governments replenish strategic reserves drawn down during the crunch. Neither is settled. If the clandestine flows that have so far capped upside begin to thin — through tighter insurance underwriting, enforcement action, or a genuine Strait reopening — the distance between $93 ICE Brent front-month and the extreme upside scenarios implied by the inventory data narrows fast.5,1