Brent Reclaims $100 After Iran Strikes Oman's Oil Bypass

Salalah Changes the Calculus

The Strait of Hormuz has been effectively closed to commercial traffic since early March. Tankers rerouted to Oman's Port of Salalah, on the southern coast facing the Arabian Sea, as the primary alternative. On March 11, Iranian drones struck the port's largest fuel storage facility, igniting at least three fuel tanks and sending thick smoke across the complex.

Oman is not a belligerent in this war. The strike on Salalah — along with earlier Iranian attacks on Duqm Port since March 1 — signals that Iran is deliberately targeting the bypass infrastructure, not just the strait itself. If Hormuz is the front door for Gulf crude, Salalah was the back door. Iran just set fire to it.

The Argus Media report confirmed multiple tanks damaged. With both the strait and its main alternative now under direct threat, there is no safe maritime route for crude leaving the Persian Gulf. Saudi Aramco's East-West pipeline to the Red Sea port of Yanbu remains the only functioning outlet, and it can carry roughly 5 million barrels per day — a fraction of the 20 million bpd that normally moves by sea.

400 Million Barrels, 12 Days Too Late

The IEA's unanimous 400-million-barrel reserve release is the largest in the agency's history, more than double the 182-million-barrel response to Russia's invasion of Ukraine. The U.S. is contributing 172 million barrels, Japan 80 million, South Korea 22.5 million, Germany 19.5 million, and France 14.5 million.

The market's verdict was immediate and blunt. Brent briefly dipped below $85 on early headlines, then reversed straight through $100. The cumulative supply shortfall from 12 days of Hormuz closure already exceeds 200 million barrels — half of the entire planned release, before a single SPR barrel has shipped.

JPMorgan estimates that IEA members can physically deliver a maximum of 1.2 million barrels per day from reserves. The strait normally carries 20 million bpd. That is a 6% replacement rate. Maksim Sonin at Stanford's Center for Fuels of the Future noted that markets are pricing on expectations, not announcements, and so far expectations remain firmly on the concerned side. Gregor Semieniuk at UMass Amherst added the longer-term problem: once the reserves are gone, "part of the firepower is gone and a continued blockage is even more threatening."

Goldman Extends the Clock

Goldman Sachs raised its Q4 2026 Brent forecast to $71 per barrel from $66, and WTI to $67 from $62. The key assumption change: Goldman now models 21 days of severely constrained Hormuz flows at 10% of normal levels, followed by a 30-day gradual recovery. The previous assumption was a 10-day disruption.

Goldman's fair value range sits at $76 to $93 if the disruption continues on its current trajectory. Brent is trading above $100 — meaning the market is pricing in a scenario worse than Goldman's base case. The gap between Goldman's ceiling and spot represents the premium for an open-ended closure that nobody in Washington or Riyadh has a plan to resolve.

The EIA revised its 2026 Brent average from $57.69 to $78.84, projecting prices above $95 for the next two months before declining to around $70 by year-end — but that forecast assumes the conflict doesn't worsen. Given that Iran is now expanding its target set beyond Hormuz to alternative export infrastructure, the base case for a quick resolution is eroding by the day. If the disruption extends, analysts at UMass warn prices could exceed $150, potentially reaching above $200 with sustained 20% supply cuts.

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