Oil Exports Rise, but Iran War Far from Over

The U.S. conflict with Iran, now in its eighth month, has seen a recent uptick in oil exports from the Middle East, though not from Iran itself. Private firm Kpler estimates that September crude oil exports reached nearly 70% of prewar levels, with major U.S.-allied producers exporting about 13 million barrels a day, down from 19 million in February. Iran, however, has been unable to move its oil exports through the Strait of Hormuz since the U.S. Navy imposed a blockade in July.

President Donald Trump has claimed that the U.S. has "almost total control" of the strait and that the country is winning the war "very soon." However, experts caution that increased oil exports do not indicate Iranian willingness to meet Trump’s demands, which include ending nuclear and missile programs and regime change. The reality is more complex, with the Brent crude oil price remaining over $100 a barrel and U.S. gas prices rising significantly since the war began.

The Strait of Hormuz remains dangerous, with Iran continuing to attack shipping. The U.S. has managed some safe passage through massive, unsustainable navy deployments, including two aircraft carriers. Most of the increase in exports comes from alternative, more expensive routes. The conflict has also damaged refineries and processing plants in the Gulf, limiting exports of refined petroleum products and liquefied natural gas.

The economic impact of the war is severe, particularly for Iran, where inflation exceeds 80%. Despite this, there is no sign that economic hardship will lead Iran to surrender. The regime has a history of surviving U.S. sanctions, and recent attacks on ships suggest it is more likely to lash out than capitulate. Trump is considering intensifying U.S. involvement after the midterm elections, but military solutions appear unlikely to end the conflict. The only viable path forward seems to be renewed negotiations, potentially involving concessions on sanctions and frozen assets.