Middle East crude shipments have nearly returned to normal. JPMorgan (NYSE: JPM) and Goldman Sachs (NYSE: GS) both track the recovery: JPMorgan estimates Middle East crude flows have recovered to 98% of pre-war levels, and Goldman Sachs puts Persian Gulf exports at 23.3 million barrels a day, in line with the prior year’s average. On Bloomberg, correspondent Stuart Livingstone-Wallace asked the question every oil investor should be asking, citing JPMorgan’s estimate: “If I told you we’re back up to 98% of prewar flows, you would expect the oil price to plummet and plummet by probably $50 a barrel. Why is it not doing that?”
The answer matters for anyone exposed to energy stocks, inflation or fuel costs. The war began on February 28th, and regular gasoline averaged $4.46 per gallon as of September 28, 2026. Livingstone-Wallace answered his own question in four parts.
A Billion-Barrel Hole Normal Shipping Can’t Refill
Stuart Livingstone-Wallace said the Middle East lost over one billion barrels of supply during the conflict’s first months. Flow is a rate: barrels per day moving through a pipe or strait. Inventory is a level: barrels sitting in storage. Restoring the rate leaves the level exactly where the shortfall left it.
The U.S. Energy Information Administration projected in May that global oil inventories would fall by an average of 8.5 million b/d in 2Q26. Today’s cargoes cover today’s demand. Rebuilding those depleted stockpiles requires supply running above demand for a long stretch.
War Risk Rides on Every Cargo
“We know that shipping is continuing to come under attack in Hormuz. We know the shipping is certainly a very high risk in the Red Sea as well. Those are the two main conduits out of the region.” In early September, Bloomberg reported a couple of tankers hit by Iranian drones or missiles. A cargo that arrives safely still carries higher war-risk insurance, pricier freight and the cost of buyers holding extra safety stock. Those costs get priced into every barrel.
Washington Is Still Tapping Its Emergency Stockpile
“The US is still having to release oil from strategic petroleum reserve to try and prop up the market and keep a damper on the price.” The Strategic Petroleum Reserve is government-owned emergency crude stored in underground salt caverns, meant for supply shocks. Continued draws signal stress. A well supplied market would need no government barrels.
Qatar-Mediated Talks Offer Little Near-Term Relief
“The latest is the reporting we had on Monday from the Iranian side where they were expressing this sort of deep pessimism that they can get a deal done anytime soon.” The talks are mediated by Qatar, and neither side is described as willing to move on its stated red lines. With U.S. midterms just a few weeks away, a quick resolution looks less likely.
Crude Is Falling, Far Slower Than Flows Suggest
Prices are coming down. In the most recent settled session available, on September 22, 2026, Brent settled at $114.89 and West Texas Intermediate settled at $96.41. A week earlier, on September 15, 2026, Brent settled at $130.80. On April 7, 2026, Brent settled at $138.21. Just before the war, on February 27, 2026, it settled at $71.32.
The market is releasing the war premium gradually, and the floor sits far above where it started. Livingstone-Wallace’s question stands: crude is falling far less than a full flow recovery means.
Two Banks, Two Different Yardsticks
JPMorgan measures Middle East crude flows against pre-war levels. Goldman Sachs measures Persian Gulf exports against the prior year’s average. Their estimates of the Hormuz recovery do not fully line up, and same-day trade coverage framed their numbers as diverging. Treat any single recovery percentage as an estimate subject to revision.
What Would Change the Picture
- Refined products: Stuart Livingstone-Wallace said diesel and gasoline shipments sit at 58% of pre-war levels. A rise toward crude’s pace would ease pump prices.
- Reserve draws: If Washington stops releasing SPR barrels, it signals officials see less stress.
- Diplomacy: Any movement from the Qatar-mediated talks would challenge the risk premium. Continued attacks in Hormuz or the Red Sea would boost it.