Strait of Hormuz Attacks Threaten Gulf Oil Export Recovery

Oil exports from Gulf countries have rebounded to near pre-war levels, but rising tensions in the Strait of Hormuz threaten to disrupt this recovery. According to marine intelligence firm Kpler, crude oil exports from the Middle East, excluding Iran, averaged 16.5 million barrels per day from September 1 to 28, recovering to 87% of pre-war levels. Saudi Arabia's daily exports surged from 2.45 million barrels in August to 6.9 million barrels in September, thanks to U.S. Navy escorts and a crude oil shuttle method that bypasses the Strait of Hormuz.

However, the recent resurgence of ship attacks in the Strait of Hormuz has raised concerns. The British Maritime Trade Organization reported seven airstrikes targeting ships in the region since September 28. Experts warn that these attacks could reduce daily oil shipments by 2 million to 3 million barrels, undermining the fragile recovery. Rory Johnston of Commodities Context noted that the current pace of crude oil transport is unsustainable due to the high costs of shuttle operations, which can reach $30 million to $40 million per trip.

Adding to the instability, Houthi rebels in Yemen have launched missile and drone attacks on Saudi oil facilities in Riyadh and Qurais. The rebels claim these strikes are in response to airstrikes in Yemen's capital, Sanaa. Yemen's government forces have announced a military campaign to retake territory from the Houthis, who have threatened the Red Sea trade route with support from the U.S. and Saudi Arabia. Analysts predict that these escalating conflicts could lead to further fluctuations in international oil prices, which remain around $100 per barrel.