Gulf Nations Use Workarounds to Keep Oil Flowing Amid Iran War

Despite initial concerns about oil prices skyrocketing due to the Iran war, nearly seven months into the conflict, prices are expensive but not exorbitant. The Gulf nations have found ways to keep oil flowing through alternative routes and pipeline capacity.

Saudi Arabia and other Gulf producers quickly responded by using unused pipelines and finding new routes when Iran shut down the Strait of Hormuz in May. When Iranian-backed Houthi rebels in Yemen disrupted one workaround, the Saudis redirected their shipments northwest to the Mediterranean, making a huge detour around Africa.

Analysts estimate that some 6 million barrels of oil per day or more have been passing through the U.S.-supervised route near Oman, which is about 40% of prewar flows. This has kept the global economy supplied, but at a high cost. The workarounds are expensive and may not be sustainable.