Gulf Oil Exports Surge Despite Wave of Tanker Attacks at Hormuz

Oil exports from the Gulf have rebounded significantly in recent days despite a growing wave of attacks on vessels around the Strait of Hormuz, according to maritime experts and ship trackers.

Maritime data firm Kpler said Gulf oil flows, excluding Iran, have returned to more than 81% of pre-war levels in September, while crude exports from the wider Middle East exceeded pre-war levels over a 14-day stretch this month. The recovery, however, has come alongside an increase in attacks on oil tankers, leaving shipping firms to contend with higher freight, insurance and security costs.

On Tuesday, 12 crew members aboard a Panama-flagged oil tanker were wounded in an attack by an unidentified flying object as it transited the Strait of Hormuz, according to a statement from India's Ministry of External Affairs.

Before the US-Israel war with Iran began on Feb. 28, the Strait of Hormuz typically handled about 125 large commercial ships a day, with the volume passing through accounting for roughly 20% of global crude and liquefied natural gas supplies.

In retaliation for US-Israeli strikes, Iran has effectively blockaded the strait, while Washington maintains a blockade of Iranian ports.

Recent tanker attacks

The security situation at the Strait of Hormuz has continued to deteriorate even as more oil leaves the region. According to maritime intelligence service Marisks, at least seven tanker-related incidents were reported over the past week.

On Oct. 1, the Kuwait-flagged very large crude carrier (VLCC) MT Kazimah III caught fire after being struck while transiting the strait, with five crew members rescued safely. On Oct. 4, the Liberia-flagged Aframax Lipsi was hit northeast of Oman's Jazirat Umm al-Fayarin island, damaging its engine room but causing no casualties.

The United Kingdom Maritime Trade Operations (UKMTO) said that since Oct. 2, at least one attack has been recorded daily at the Strait of Hormuz or in the Gulf of Aden, where Iran-backed Houthi forces target vessels linked to Saudi Arabia. On Monday, a tanker preparing to enter the Strait of Hormuz near Oman was ordered by Iran's Islamic Revolutionary Guard Corps (IRGC) to turn around or face attack, according to UKMTO.

Oil volumes through the Strait of Hormuz

Despite the attacks, oil exports from the region have risen sharply. According to preliminary Kpler data, the seven-day moving average for Middle East crude exports reached 18.3 million barrels per day on Sept. 30, compared with an average of about 18 million bpd in the 12 months before the war. Vortexa separately estimated that the 14-day moving average for Middle East crude and condensate exports had reached 18.6 million bpd.

Not all of that oil, however, is actually shipped through Hormuz. Kpler estimates that about 40% of current oil exports are routed around the strait, while much of the crude that does pass through is transferred between ships offshore.

Partly thanks to the rise in oil exports, prices continued to fall. Brent, the global benchmark, dropped 0.75% to $99.57 a barrel on Tuesday, while US WTI fell 1.2% to $88.37 a barrel, according to data from Oilprice.com.

US President Donald Trump has repeatedly claimed credit for the increase in oil flows, saying Washington controls the strait and that US forces are successfully protecting ships transiting Hormuz. Iran disputes that oil volumes through the key shipping lane have risen, calling the figures "insignificant" and saying it still effectively controls the strait.

How oil is getting past Hormuz

The export recovery is largely due to Saudi Arabia's use of alternative export infrastructure and an increasingly complex crude shipping system around Hormuz. PVM Oil Associates analyst Tamas Varga attributed the rise in Middle East crude supply to two factors: the effective use of Saudi Arabia's East-West pipeline and ship-to-ship transfers around the Strait of Hormuz.

Saudi Arabia's East-West pipeline carries oil from fields in the country's east to the port of Yanbu on the Red Sea in the west. Ship-to-ship transfers occur when smaller shuttle vessels, often with transponders switched off to avoid detection, carry oil through the Strait of Hormuz before unloading onto larger ships waiting on the other side.

Sustainability of the flows

Varga said the current flows can be sustained as long as those methods and routes remain safe. Saudi Arabia's East-West pipeline has previously been temporarily shut by drone attacks, such as one launched by Iran-backed groups from Iraq in September.

"Flows will hold unless attacks on vessels, shipping lanes or pipelines resume — which there is no sign of imminent, but could happen at any time if geopolitical tensions flare up," he said.

Maintaining the flows, however, is also putting pressure on the shipping system. IG Group analyst Chris Beauchamp said the shuttle system in the Gulf is working effectively to move oil out, but requires a large number of ships. That demand drives up freight costs and reduces the pool of available vessels elsewhere, while Asian customers increasingly have to source crude from further afield.

"It used to be a supply story, now it's a story about the underlying transport mechanism. You can't build ships overnight," Beauchamp said.

Varga said oil prices remain relatively high — now below $100 a barrel compared with about $72 before the war broke out — due to higher shipping and insurance costs. Last week, G7 members announced they would release up to 100 million barrels of oil from strategic reserves, including diesel, in a bid to keep prices in check. The additional release of crude and diesel could help cool prices, but with global inventories already thin, a further deterioration in Middle East security could quickly push prices back up.

"Only a sustainable, credible peace deal between the US and Iran, along with the permanent and unconditional reopening of the Strait of Hormuz, can restore the pre-conflict status quo," Varga said.

On Monday, Saudi Aramco CEO Amin Nasser warned the impact of the disruption could last long after Hormuz reopens, even if that happens. Speaking at the Energy Intelligence conference in London, Nasser said nearly 3 billion barrels of oil have been lost since the conflict began in late February, and that rebuilding depleted inventories while meeting demand could take up to two years.

"The system is under stress," he added.