Key facts
- Gulf oil exports reached about 16.5 million bpd in September, near pre-war levels.
- Only 60% of these exports passed through the Strait of Hormuz, down from 83% before the war.
- Exporters are using pipelines, bypass ports, and ship-to-ship transfers to move oil.
- These workarounds are more expensive and less efficient, leading to elevated freight and security costs.
- Iran's seaborne crude exports have fallen to near zero from 1.7 million bpd.
- Saudi Arabia's exports rebounded to 6.9 million bpd in September after pipeline damage.
Oil exports from the Gulf region have recovered to approximately 16.5 million barrels per day (bpd) in September, nearing pre-war levels, despite a significant decrease in traffic through the Strait of Hormuz. Standard Chartered reported that only 60% of these barrels transited the strait, compared to 83% before the conflict.
Exporters have adapted by utilizing pipelines, bypass ports, and extensive ship-to-ship (STS) transfers to move crude. These workarounds, however, are more expensive and less efficient, leading to increased voyage times, higher freight costs, and strained STS capacity. The report highlights Saudi Arabia's adaptation following damage to its East-West pipeline, with exports rebounding to about 6.9 million bpd in September, utilizing 19 Very Large Crude Carriers (VLCCs) through Hormuz in one week.
While the recovery in physical flows has reduced the probability of extreme shortage scenarios, the elevated logistical costs mean that barrels are moving at a higher price. Iran's seaborne crude exports have consequently fallen to near zero from around 1.7 million bpd previously, weakening its ability to influence oil flows through the strait but potentially increasing the risk of military escalation.