Crude oil exports from the Strait of Hormuz have largely returned to levels seen before the Iran war, as oil producers and the shipping industry have developed alternative transport methods. In September, at least 16.5 million barrels per day (bpd) left the region, matching the pre-war average, excluding Iran.
Pipeline exports and ship-to-ship transfers are among the methods now in use, with the US military continuing to escort some vessels. According to Kpler analysis, about 40% of the region's crude is now transported without transiting the strait, compared to 17% before the conflict began on 28 February. Saudi Arabia restarted operations on its east-west pipeline in late September, allowing exports from the Red Sea port of Yanbu to resume.
Despite the recovery in crude exports, flows of refined products like diesel remain constrained, pushing prices higher. Kpler analysts noted that less than 20% of pre-war levels of refined products shipped through Hormuz are currently being transported, with a seven-day average of 677,000 bpd as of Monday, compared to 3.6 million bpd before the conflict.
The underlying threat to ships operating around the Strait of Hormuz has not disappeared, according to Richard Meade, editor in chief of Lloyd’s List. He stated that while oil flows have recovered due to market participants accepting greater operational complexity and higher costs, the danger remains. This was highlighted on Tuesday when three Liberian-flagged tankers were hit by projectiles while transiting the strait.
The price of Brent crude briefly rose above $100 a barrel on Thursday, increasing by 3% to $101. This rise followed reports that China had suspended exports of oil products to regions beyond Hong Kong and Macau, a move that could add further pressure to oil markets.