Crude oil exports from the strait of Hormuz have largely recovered to levels observed before the outbreak of the Iran war, reaching at least 16.5 million barrels per day in September according to trade intelligence data. This represents a substantial recovery from March’s average of 6 million barrels daily during the initial weeks of the conflict that began on 28 February.
Oil producers and shipping operators have adapted to disruptions by employing multiple transportation methods. Approximately 40% of regional crude now travels through alternative routes, specifically Saudi and Emirati pipelines, compared to just 17% before the conflict. Saudi Arabia successfully resumed operations on its east-west pipeline in late September following repair of damage sustained during drone attacks, enabling exports to resume from the Red Sea port of Yanbu. Additionally, a shuttle fleet of large crude carriers operates with disabled satellite transponders, transferring cargo to different vessels in open water off the coasts of Oman or the United Arab Emirates. Over 70% of crude passing through the strait in August underwent ship-to-ship transfers, whereas such transfers were virtually nonexistent before the war.
Despite recovery in crude exports, supplies of refined petroleum products remain significantly constrained. Less than 20% of pre-war volumes of refined products were being transported through the strait, with recorded flows of only 677,000 barrels daily compared to 3.6 million before the conflict. This shortage has driven diesel prices to record levels, with UK prices reaching 199.18 pence per liter.
Security concerns persist despite improved export flows. Three Liberian-flagged tankers were struck by projectiles while transiting the strait earlier this week. Industry observers note that while market participants have absorbed increased operational complexity and costs to maintain oil flows, the underlying security threats remain unresolved.
Crude prices have moved higher amid the recovery in exports balanced against uncertainty regarding long-term conflict resolution and strait access. Brent crude briefly exceeded $100 per barrel on Thursday, rising 3% to $101. Additional pressure came from reports that China had suspended oil product exports beyond Hong Kong and Macau, suggesting concerns about domestic supply availability.
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