Middle East Crude Exports Recover to Pre-War Levels via Alternative Routes

The Middle East’s crude oil exports have rebounded to pre-Iran war levels, despite ongoing tensions in the Strait of Hormuz. Data from ship-tracking firm Kpler shows that at least 16.5 million barrels per day (mbd) of crude left the region between September 1 and 28, matching pre-war averages excluding Iran. This marks a significant recovery from March’s low of 10.5 mbd.

The recovery has been driven by alternative routes and operational adjustments, collectively known as the ‘Hormuz Plus One’ strategy. Before the conflict, 83% of the region’s crude passed through the Strait of Hormuz, but in September, only 40% did so. The remaining 60% of exports used alternative routes, including the Red Sea and the Gulf of Oman, particularly Fujairah. Saudi Arabia and the UAE have successfully diversified their export routes, with Saudi crude increasingly flowing through the East-West Pipeline to Yanbu on the Red Sea.

Kpler’s data also highlights the use of shuttle tankers to navigate the Strait of Hormuz. More than 70% of the crude crossing the strait in August involved tanker changeovers, though this practice is now easing as exporters shift to direct voyages. The agency noted that at least 63 Very Large Crude Carriers (VLCCs) are now working the shuttle trade, with a core fleet of 35 completing multiple round trips. The Red Sea route faced disruptions, including a maritime embargo by Yemen’s Houthis and an attack on the East-West Pipeline, but flows have since resumed.

Iran’s crude exports have been notably absent from the recovery, fluctuating with U.S. policy rather than logistical adjustments. In March, Iranian crude accounted for 1.6 mbd of the 1.8 mbd still crossing Hormuz. However, a U.S. naval blockade in April pushed crossings to near zero by May. Iranian crude stocks rose by about 20 million barrels from mid-February to late May before drawing down as exports resumed briefly in June. Talks to reopen the strait have resumed, but Washington rejected an Iranian offer to lift the blockade.