Oil Industry Adapts to Partially Closed Strait of Hormuz

Goldman Sachs says oil producers and shippers have adapted to the partially closed Strait of Hormuz, finding ways to move 15-16 million barrels a day out of the region. This is a surprising recovery, given that the waterway remains dangerous and the Iran war continues to disrupt normal shipping.

The industry has changed how it moves oil by using specialized shippers for 'dark' crossings with tracking transponders switched off, ship-to-ship transfers, and alternative routes around the strait. Qatar and Kuwait have reportedly restored crude exports to 70% of pre-war levels by shuttling oil through Hormuz and transferring cargoes in the Gulf of Oman.

The adaptation is changing the economic consequences of the conflict, which has now lasted six months. Brent crude remains below $90 a barrel, despite early-war assumptions that sustained disruption at Hormuz would produce an uncontrolled oil-price shock.