Crude oil exports from the Strait of Hormuz have largely rebounded to levels seen before the Iran war, with at least 16.5 million barrels per day leaving the region in September, according to trade intelligence firm Kpler. This represents a significant recovery from March’s average of 6 million barrels per day during the early weeks of the conflict, which began on 28 February following US and Israeli strikes on Iran.
Oil producers and shipping companies have implemented various workarounds to circumvent disruptions in the strategic waterway. Approximately 40 percent of regional crude now travels through Saudi and Emirati pipelines rather than transiting the strait, compared with just 17 percent before the war. Saudi Arabia restarted operations on its east-west pipeline in late September after drone-related damage, resuming exports from the Red Sea port of Yanbu. Additionally, the majority of crude passing through the strait is transported on large tankers with disabled satellite transponders, with cargo transferred to different vessels in open water off Oman or the United Arab Emirates. More than 70 percent of crude through the strait in August underwent such transfers, a stark contrast to the negligible rate before the conflict.
Despite the recovery in crude exports, refined product supplies have remained severely constrained. Less than 20 percent of pre-war refined product volumes are being transported through Hormuz, with a seven-day average of 677,000 barrels per day recorded compared with 3.6 million previously. This shortage has driven diesel prices to record levels, with UK prices hitting 199.18 pence per litre on Monday, with many forecourts reporting prices exceeding £2.
Security threats persist despite the export recovery. Three Liberian-flagged tankers were struck by projectiles while transiting the strait on Tuesday. Analysts caution that while market participants have absorbed operational complexity and higher costs, the underlying threat to vessels and crews remains unresolved. Crude prices have climbed in response, with Brent briefly exceeding $100 a barrel on Thursday, up 3 percent to $101, amid uncertainty over a lasting solution to the conflict and the strait’s reopening. Additional pressure emerged from reports that China had suspended oil product exports beyond Hong Kong and Macau, signaling potential concerns about domestic supply availability.
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