Brent Remains Above $104 as Hormuz Closure and Middle East Supply Cuts Persist

Brent crude hovered just above $104 per barrel following a minor pullback from a recent price surge. Global energy flows remain severely constrained by the effective closure of the Strait of Hormuz since March, a chokepoint that previously handled approximately one-fifth of worldwide oil and liquefied natural gas shipments.

Upstream supply has contracted significantly, with Saudi Arabian crude output falling by an estimated 1.9 million barrels per day in August. Alongside record-high tanker freight rates, projections from the US Energy Information Administration indicate that Middle Eastern production volumes are unlikely to return to pre-conflict levels before the second quarter of 2027.

The prolonged disruption continues to pressure import-reliant economies. The European Union remains exposed to these price swings, relying on imports for 57 percent of its total energy consumption, representing an expenditure of €340 billion.