Middle East Oil Exports Rebound Despite Hormuz Attacks and Logistical Challenges

Middle East crude oil exports have surged back to pre-war levels and even exceeded them in late September, despite ongoing attacks on commercial vessels and disruptions in the Strait of Hormuz. Kpler data revealed that the region’s seven-day moving average for crude exports hit 18.3 million barrels per day on September 30, surpassing the 18 million barrels per day averaged before the conflict between the US, Israel, and Iran began in February. Exports reached or exceeded pre-war levels on 14 days in September, with cargoes moving through Hormuz, the Red Sea, and alternative Gulf routes.

The rebound in exports was driven primarily by Saudi Arabia increasing shipments through both the Gulf and Red Sea, while Iraqi operators also boosted shipments through Hormuz after securing transit permissions. This recovery could ease global crude shortages and provide more supply for Asian refiners. However, normalcy has not fully returned, as ships transiting Hormuz still face a heightened and unpredictable threat, with recent attacks on tankers by unknown projectiles.

The increase in exports has also created logistical challenges. More very large crude carriers are being used to shuttle oil through Hormuz before cargoes are transferred or redirected, and ship-to-ship transfer capacity in the Gulf of Oman is becoming constrained. These changes have led to exceptionally high freight and insurance costs, with tanker rates on some Middle East-to-Asia routes rising dramatically. As a result, Brent crude has remained above $100 a barrel despite the improvement in supply volumes.

The global oil market may now be shifting from a pure physical supply shortage to a logistics, shipping, and refining-capacity problem. While higher exports should reduce some upward pressure on crude prices, continued tanker attacks, elevated insurance costs, and constrained refining capacity mean the benefits may not fully reach consumers. The next critical test will be whether Middle East producers can sustain current export levels without further escalation in attacks or disruptions to the region’s export infrastructure.