Middle East Oil Exports Surge Despite Tanker Attacks in Strait of Hormuz

Middle East oil exporters saw a temporary surge in shipments, with exports reaching pre-war levels for about half of September. Provisional data from Kpler showed that the seven-day moving average for crude exports from the region hit 18.3 million barrels per day on September 30. This marked the highest volumes since before the U.S.-Israeli war with Iran began, with exports exceeding pre-war levels on 14 days in September.

The increase in shipments was driven by Saudi Arabia, which ramped up exports through both the Red Sea and the Gulf. This surge came despite a September 10 attack on the East-West pipeline. The rise in exports required more supertankers to shuttle crude through the Strait of Hormuz, with ship-to-ship transfers in the Gulf of Oman reaching their limits. Iraq also secured permission from Iran to allow Iraqi oil tankers to pass through Hormuz, further boosting flows.

However, the outlook for sustained higher exports remains uncertain due to logistical constraints and a sharp increase in tanker attacks. Shipping intelligence service Marisks reported a 'heightened and increasingly unpredictable kinetic threat' in the Strait of Hormuz. At least seven incidents were reported in the past week, including attacks on the Very Large Crude Carrier Kazimah III on October 1 and the Aframax tanker Lipsi on October 4. The United Kingdom Maritime Trade Operations agency has reported daily attacks in the Strait of Hormuz or the Gulf of Aden since October 2.

Despite the risks, liquefied natural gas (LNG) cargoes exiting the Strait of Hormuz also rose in September to their highest levels since February. Senior market analyst Xavier Tang noted that the increase in Middle East supplies will help alleviate tightness in the oil market, particularly for Asian refiners.