Middle East Oil Price War: The $97 Brent Glut

Executive Summary

LONDON — Brent crude has tumbled more than 17 percent in a week to about $97 a barrel, its steepest weekly fall since the April 2020 pandemic crash, as Gulf oil flows through the Strait of Hormuz recover to near pre-war levels and Middle East producers cut prices to win back buyers. The war premium that lifted Brent to about $126 in late April has drained away in days.

The numbers behind the reversal are stark. Crude exports through Hormuz averaged 10.3 million barrels a day in October, up from virtually zero in the first month of the war, according to Kpler data cited by Reuters. Total regional exports reached 16.6 million barrels a day, just short of the 17 million pre-war average, while global output hit 85 million barrels a day — above its five-year average.

This study measures the supply surge, the price war among Gulf producers, and the demand slump that together point to a growing global surplus — and tests the case against the attacks, shipping risks and depleted inventories that could still reverse the slide.

Methodology

This study rests on market data published on November 9, 2026 by Reuters, Bloomberg and Rigzone, cross-checked against Kpler tanker-tracking figures, Energy Aspects production estimates and JPMorgan supply-demand balances. Price levels use front-month Brent and West Texas Intermediate futures; weekly changes are measured on settlement prices. Every figure is labelled by source and date, and where outlets disagree on the size of the weekly fall — 13 percent on one contract measure, more than 17 percent on another — both readings are shown.

Historical comparisons use pre-war baselines from February 2026 and the pandemic crash of April 2020. The method mirrors our earlier study of the Hormuz energy shock, which measured the supply disruption at its peak; this study measures the same market on the way back down, using the same flow and price indicators so the two readings can be compared directly.

Empirical Findings

The price collapse was the sharpest in six years. Brent for January delivery settled at $98.32 a barrel on Friday, down from $113.43 on October 30, and traded near $97 on Monday; West Texas Intermediate settled at $90.83 and traded near $90.50. Reuters put the weekly fall at more than 17 percent, the steepest since the pandemic; Bloomberg's contract measure put it near 13 percent, its biggest since 2022.

The trigger was politics as much as supply. The Democratic sweep of the United States midterm elections convinced traders that Washington would de-escalate the war with Iran, and President Donald Trump told CNN on Sunday that further strikes were "highly unlikely" while nuclear talks and the reopening of Hormuz made progress. He meets Qatar's prime minister on Monday as Doha pushes a bridge deal to end the war.

Supply has already come back. Exports through Hormuz averaged 10.3 million barrels a day in October, against a pre-war average of 13.5 million, and total regional exports of 16.6 million barrels a day were just short of the pre-war 17 million, Kpler data showed. OPEC output rose last month to 88 percent of its February volume, according to a Bloomberg survey, and global production reached 85 million barrels a day — the highest since the war began.

Producers are now fighting for buyers. Saudi Arabia cut the December price of its flagship Arab Light crude for Asian customers by $2 a barrel, pushing its discount against the Oman/Dubai average to $6.50 — the lowest since May 2020. Oman's premium to the Dubai benchmark collapsed from $34 a barrel in mid-September to 95 cents last Tuesday before recovering slightly to $1.76 on Thursday, Reuters data showed.

Demand, meanwhile, has not kept up. JPMorgan estimates that global oil consumption has fallen by about 3.3 million barrels a day since the war began, and that supply exceeded consumption by 1.1 million barrels a day in September, with the surplus widening to 1.4 million in October. Rystad Energy's analysts say the market is gradually shifting toward oversupply — the same risk-off mood measured in our study of the November AI sell-off and the central-bank squeeze.

The glut is not yet a certainty. Tanker attacks continue: the British maritime agency UKMTO reported a projectile hitting a tanker leaving Hormuz over the weekend, a Greek-managed tanker exploded in the Gulf on November 5, killing one crew member, and Houthi missiles damaged Aramco offices in Riyadh on Sunday. Refining capacity has fallen this year and inventories are depleted — the same constraints that could send prices back up if shipping stops.

Outlook

Three reports this week will test the glut case: the United States Energy Information Administration publishes on Tuesday, OPEC on Wednesday and the International Energy Agency on Friday. OPEC+ held December quotas unchanged at its November 1 meeting, and its next full ministerial session is November 29. In the United States, the Baker Hughes rig count rose to 604, its highest since 2024, with 463 oil rigs drilling.

If diplomacy holds, prices have further to fall. One market assessment puts Brent at $70 to $85 a barrel if a deal lifts the American naval blockade of Iran — a level that would ease fuel costs for importers but squeeze the budgets of producers that spent the war year at war prices. Iraq, which says the conflict cost it $60 billion, has already resumed exports through a shipping lane near Oman.

The balance, for now, favours the buyer. A market that spent nine months pricing war now prices peace, and the producers' own price cuts are the clearest signal that the fight has moved from the battlefield to the order book. Whether the glut survives the next tanker attack is the question the coming weeks will answer. News Plus Globe's business and finance desk will track the agency reports and the Doha talks as they land.