Middle East oil exports rebound to pre-war levels despite Hormuz attacks

Despite ongoing attacks in the Strait of Hormuz, crude oil exports from the Middle East Gulf region, excluding Iran, have rebounded to pre-war levels in September. According to maritime tracking firm Kpler, at least 16.5 million barrels a day (mbd) were exported during the month, matching pre-war averages. This marks a significant recovery from March's monthly average of 6 mbd.

The recovery has been facilitated by shifts in export routes. Around 40% of exports now bypass the Strait of Hormuz, up from 17% before the conflict. Key alternative routes include pipelines in Saudi Arabia and the United Arab Emirates, which have provided crucial alternatives. Many crude shipments still crossing the strait change tankers offshore.

Oil prices remain elevated, with Brent crude futures for December delivery trading at $102.25 per barrel and US benchmark West Texas Intermediate at $90.50 per barrel. Before the war, Brent futures were around $72 per barrel. The disruption in the Strait of Hormuz has had global economic implications, prompting countries to seek alternatives and causing fuel prices to surge.

Experts caution that conditions are far from normal. A US blockade on Iranian ports continues to restrict a significant portion of Iran’s oil exports. However, alternative routes such as Saudi Arabia’s East, West pipeline and the UAE’s pipeline linking Abu Dhabi to Fujairah are operating at full capacity.

The OPEC+ group, comprising the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed to leave their production targets unchanged for November, in line with expectations. The seven core members produced about 25 million barrels of crude oil a day in August, up 630,000 barrels a day from July.