Middle Eastern Oil Exports Rebound Amid Ongoing Shipping Risks

Crude oil exports from the Middle East have staged a remarkable recovery since the war with Iran began, according to industry observers. Exports in September reached their highest level since the conflict started, despite Iranian attacks on shipping in the Strait of Hormuz.

The refinery bottleneck that has caused a global spike in diesel prices persists, however. European Union figures published on October 1 showed diesel pump prices at record levels, and prices have also surged in the United States.

Richard Meade, chief editor of Lloyds List, noted that more oil is coming out of the Middle East Gulf than expected, despite the risks to shipping. The Saudi East-West oil pipeline and the use of oil shuttles and ship-to-ship transfers have helped increase exports, although the Saudi pipeline was damaged in an attack by Iran-aligned Houthi militants on September 10.

The United Arab Emirates has also found a solution to bypass the Strait of Hormuz using its pipeline to the port of Fujairah. The risks to shipping have not disappeared, however, with three Liberian-flagged tankers being struck by unknown projectiles when transiting the Strait of Hormuz on September 30.

Industry analysts suggest that the dangers have simply been priced in, and crude prices have retreated from recent highs. However, refinery bottlenecks remain a global issue, particularly in the Persian Gulf, where Iranian attacks on refineries combined with shipping disruption have led to a collapse in output.