Iran blockade and Saudi pipeline damage push Brent crude near $110

Key Points:

• The U.S. is effectively blocking Iran’s oil exports through the Strait of Hormuz, significantly reducing Iran's crude shipments, with Iranian exports dropping from about 2 million barrels per day in March to roughly 220,000-255,000 barrels per day in August.
• Iran-backed Houthi rebels have expanded control around the Bab el-Mandeb Strait, a critical shipping route, increasing regional tensions and threatening global oil supply chains, while Saudi Arabia's East-West Pipeline was severely damaged by a drone attack, disrupting oil flows for weeks.
• These disruptions have contributed to rising U.S. fuel prices, with diesel reaching a record $6.23 per gallon and Brent crude hitting around $110 per barrel, reflecting broader energy supply challenges linked to the conflict.
• Despite mounting economic pressure from sanctions and a naval blockade, Iran remains resilient by printing currency and managing inflation, though physical shortages, especially of gasoline due to limited refining capacity, pose a critical challenge.
• Analysts suggest Iran may be willing to negotiate concessions to end the conflict and preserve the regime, but the key question remains whether the U.S. will accept terms that bring a resolution before Tehran or its allies escalate costs further.