Gulf Producers Find Workarounds to Keep Oil Flowing Through Iran War

When Iran shut down the Strait of Hormuz at the start of the war, it was feared that oil prices would skyrocket and crater the world economy. Instead, nearly seven months on, oil is expensive but not exorbitant, with prices around $100 a barrel.

Saudi Arabia and other Gulf producers quickly found alternative routes and reached for unused pipeline capacity when Iran shut down the Strait of Hormuz. When Iranian-backed Houthi rebels in Yemen disrupted the Yanbu workaround in July by declaring a blockade of Saudi oil shipments, the Saudis redirected Asia shipments northwest to the Mediterranean.

The workarounds are expensive and may not be sustainable, with some analysts estimating that 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.