Gulf oil exports top prewar levels despite Iran attacks

Oil leaving the Middle East has climbed past its prewar level, even as Iran keeps attacking ships in the Strait of Hormuz. In the week ending October 18, oil movements from the region averaged more than 24 million barrels per day, according to ship-tracking firm Kpler data cited by The Wall Street Journal News Corp ↗ 2.03%. That compares with a prewar average of 23.3 million barrels. The figure includes shipments through Hormuz and through other regional routes. The Journal said the rebound comes from a makeshift shipping network that operates under U.S. protection during one of Iran's most intense offensives in the strait.wsj.com

Escorts and Bypass Routes

Secretary of State Marco Rubio said 13 million to 14 million barrels of oil a day are now passing through Hormuz, with U.S. forces escorting commercial vessels. "Some days it's actually equivalent to what it was pre-conflict," Rubio said. He added that "Iran is still shooting at these, but by and large we've been able to get that flow going" (Kurdistan24; Mid-day).mid-day.com+1

Pipelines that avoid the strait carry much of the extra volume. Kpler estimates that about 40% of the region's crude now leaves without crossing Hormuz, up from 17% before the war, as Saudi Arabia and the United Arab Emirates rely more on overland routes (Kpler; RFE/RL). Saudi Arabia repaired a key cross-country pipeline after drones hit it in early September. A September 29 note from JPMorgan ↗ 0.40% put Gulf crude flows at about 98% of prewar levels.kpler.com+2

Iran Shut Out

While its neighbors' exports recover, Iran's have stopped. Adm. Brad Cooper, head of U.S. Central Command, said the U.S. naval blockade has kept Iran from exporting at least $25 billion worth of crude. He said U.S. forces have helped move more than 1.3 billion barrels through the strait since the war began (Arab Times; Times of Israel). Kpler recorded no Iranian crude loadings in September, the first such month since it began tracking Iranian exports in 2013.iranintl.com+2

Questions About Durability

The recovery has not been smooth. Kpler said crude moving through Hormuz itself fell 27% in early October from a wartime high, to about 10.1 million barrels a day. Exports from the Gulf of Oman coast and the Red Sea, at more than double their prewar rate, kept the regional total steady (Iran International; Newsweek). Iran effectively closed the waterway after U.S. and Israeli strikes on February 28.timesofisrael.com+2

The Journal reported that experienced crews and large paydays have made the tanker fleet more resilient. Oil traders, however, worry the arrangement may not last.wsj.com