Middle Eastern Oil Producers Find Workarounds to Hormuz Disruption

Oil producers in the Middle East have found ways to bypass the Strait of Hormuz and keep oil flowing, albeit at a high cost.

The disruption caused by Iran shutting down the chokepoint has led to ship-to-ship transfers and pipeline rerouting, with Saudi Arabia reversing flows on its East-West pipeline. This pipeline, damaged by Houthi strikes, was previously carrying 4 million barrels daily across Saudi Arabia to Yanbu before being shut down.

The use of ship-to-ship transfers has become a viable workaround, but it comes at a cost, adding to the end price of the cargo. As a result, oil exporters from the Gulf are discounting their crude, especially notable in Iraq's case due to its geography.