Shadow Network Keeps Gulf Oil Flowing Through Hormuz

U.S. Treasury Secretary Scott Bessent predicted that the Strait of Hormuz would become 'irrelevant' within two years, and it seems like Gulf oil producers are building their way around it. Months into the Iran war, the UAE, Iraq, Kuwait, and Qatar have moved more than 4 million barrels per day through a shadow export network of AIS-dark shuttle tankers and ship-to-ship transfers outside the Persian Gulf.

Around 150 vessels are now gathered off Oman, up from roughly 40 in January. Tankers carrying Gulf crude make the run through Hormuz with their transponders switched off, then pull alongside larger vessels waiting outside the strait to transfer their cargo. The shuttle tankers then return to the Persian Gulf for another load.

Saudi Arabia is also preparing an alternative route: state shipping company Bahri has positioned 16 VLCCs off Oman, with three more reportedly on the way. This gives the fleet capacity to carry roughly 38 million barrels as renewed Houthi attacks threaten the kingdom's existing escape route through the East-West Pipeline and Red Sea.