Gulf Oil Exports Shut Down by Disrupted Export Routes

The Gulf region experienced significant disruptions to oil exports in August 2026, with an estimated 6.7 million barrels per day of Middle Eastern crude production shut-in due to constrained export routes. The Strait of Hormuz, a critical shipping lane, carried only 20.9 million barrels per day before the disruption, while existing Saudi and Emirati pipelines offered approximately 4.7 million barrels per day of bypass capacity.

These restrictions reduced physical supply rather than just raising the cost of shipping barrels that continued moving. The Gulf disruption averaged 3.55 million barrels per day in Saudi Arabia, 1.16 million in Iraq, and 1.00 million in Iran, with smaller volumes elsewhere. Total shut-ins reached 6.7 million barrels per day, up from 5.0 million in July.

The forecast for the fourth quarter predicted an average of 5.7 million barrels per day of shut-ins, based on greater use of alternative export routes. However, this forecast was made before the later disruption to Saudi Arabia's East-West pipeline, making it a conditional recovery scenario rather than a current estimate.