Iran's Hormuz Leverage Fades as Oil Exports Shift to New Routes

The Strait of Hormuz has long been a chokepoint for global oil supplies, with Iran's ability to disrupt traffic through the waterway giving it significant leverage over the world's energy markets. However, recent data suggests that this leverage is slowly fading.

According to Kpler, at least 16.5 million barrels per day of crude left the Gulf between September 1 and 28, near the prewar average excluding Iran. But only about 60% of this oil crossed through the Strait of Hormuz, with the remaining 40% bypassing the strait via pipelines and other routes in Saudi Arabia and the UAE.

This shift is a significant change from before the war, when 83% of crude exports relied on passing through the Strait of Hormuz. The use of alternative routes has reduced Iran's ability to disrupt traffic and raise prices through threats and attacks.

Despite this reduction in leverage, analysts warn that the risks associated with shipping oil through the strait have not disappeared. Ships still require military protection, and companies are developing costly workarounds to move oil while limiting their exposure to the strait.