Key facts
- Crude oil exports from the Strait of Hormuz averaged 16.5 million barrels per day in September, equaling pre-war levels excluding Iran.
- This represents a significant increase from the March average of 6 million barrels per day.
- About 40% of crude is now transported via pipelines and Red Sea ports, up from 17% before the war.
- Refined product shipments through Hormuz are less than 20% of pre-war levels.
- Average diesel prices in the UK hit an all-time high of 199.18 pence per liter on Monday.
- Brent crude briefly traded above $100 a barrel on Thursday.
Crude oil exports from the Strait of Hormuz have largely returned to pre-war levels, with 16.5 million barrels per day shipped in September, according to data from the global trade intelligence firm Kpler. This recovery signifies that oil producers and the shipping industry have successfully implemented alternative transportation methods to circumvent disruptions in the strategic waterway.
Methods such as pipeline exports and ship-to-ship transfers have become more prevalent. Kpler analysis indicates that approximately 40% of the region's crude is now transported without transiting the strait, a significant increase from the 17% seen before the conflict. Saudi Arabia notably restarted operations on its east-west pipeline in late September, allowing for exports from the Red Sea port of Yanbu.
A substantial portion of crude passing through the strait is now carried on a shuttle fleet, with many vessels sailing with their satellite transponders turned off. These ships often transfer their cargo to different tankers in open water, typically off the coast of Oman or Fujairah in the United Arab Emirates. In August, over 70% of crude passing through the strait involved such tanker changes, a stark contrast to the pre-war period when almost no Gulf crude changed ships in the Gulf of Oman.
Despite the recovery in crude oil exports, the supply of refined products, such as diesel, remains constrained. This imbalance poses challenges for businesses and households reliant on these fuels. The average diesel price in the UK reached an all-time high of 199.18 pence per liter on Monday. Kpler analysts noted that less than 20% of pre-war levels of refined products are being transported through Hormuz, with a seven-day average of 677,000 barrels per day as of Monday, compared to 3.6 million barrels per day before the conflict.
While market participants have adapted to greater operational complexity and higher costs, the underlying threat to shipping in the region persists. This was underscored 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, reflecting ongoing market concerns about supply and geopolitical uncertainty.