Gulf Nations Find Workarounds for Iran-Disrupted Oil Flows

The Iran war has disrupted oil flows through the Strait of Hormuz, but Gulf nations have found ways to keep oil flowing through alternative routes.

Nearly seven months into the conflict, oil prices are high but not exorbitant, with analysts saying there's enough oil available to meet current global needs. Saudi Arabia and other Gulf producers quickly found alternative routes and reached for unused pipeline capacity when Iran shut down the Strait of Hormuz at the start of the war.

The Saudis initially used their East-West pipeline to carry oil to their Red Sea port of Yanbu, from where tankers headed out through the Bab el-Mandeb Strait toward Asia. The UAE also used its pipeline cutting across neighboring Oman to Fujairah, a route that skirts the strait.

The workarounds are expensive and may not be sustainable. Analysts estimate some 6 million barrels of oil per day or more have been passing through the Strait of Hormuz on the dark shuttle route on average, some 40% or more of prewar flows. The drawing down of existing commercial oil stocks has also helped keep prices in check, but cannot continue indefinitely.