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Oil shipments through the Arabian Gulf and the Strait of Hormuz from all Gulf-producing nations have fallen sharply since March 2026, S&P stated. However, several initiatives are under consideration, including routing vessels through Omani territorial waters and establishing a joint transit agreement between Oman and Iran.

The agency noted that despite these efforts, vessels have encountered intermittent Iranian attacks, limiting the number of shipping companies willing to undertake such voyages.

It added that in late August 2026, the United States imposed significant new economic sanctions on Iran alongside an ongoing US naval blockade on Iranian oil, amid persisting sporadic hostilities.

Following several upward revisions to its oil price forecasts since the outbreak of the conflict, S&P lowered its projection for Brent crude in early September to $95 per barrel for the remainder of 2026. It maintained its forecasts for 2027 through 2029 at $80 per barrel in 2027 and $65 per barrel for both 2028 and 2029.

Conflict Extending Into 2027

The agency clarified that its current baseline scenario assumes disruptions stemming from the Middle East conflict will persist into 2027, with regional oil exports likely remaining below pre-war levels.

The downside scenario entails a protracted conflict marked by an ongoing de facto closure of the Strait of Hormuz, coupled with more severe strikes against oil production facilities in GCC countries and Iran. S&P highlighted that this scenario could trigger a sharp and prolonged spike in crude prices.

Limited Strikes

The agency pointed out that Iranian strikes against Saudi Arabia have been less frequent and less intense compared to attacks directed at several other GCC states.

Saudi Arabia has largely refrained from major retaliatory operations, adopting primarily defensive measures. The impact on its hydrocarbons sector has remained contained; while attacks affected oil output at select facilities—including Ras Tanura and Jazan—the vast majority of production has continued uninterrupted.