Iran Targets US-UAE Oil Shuttle in Strait of Hormuz Amidst Escalating Conflict

Iran has signaled its intent to disrupt an Arab-operated, US-assisted oil shuttle system that has facilitated energy exports through the Strait of Hormuz during the ongoing US-Israel war. With a US naval blockade in place and sanctions tightening, Tehran has stated its intention to pursue military and diplomatic actions to compel Washington to meet its demands for reopening the strait. This vital waterway, which previously handled approximately one-fifth of global oil and gas, has been largely inaccessible to shipping since Iranian attacks commenced following US and Israeli strikes on Iran on February 28. However, the US Navy has reportedly established an alternative route to enable Gulf states to export oil amidst an energy crisis.

Mohsen Rezaei, Iran's security chief, declared on Sunday night that this shuttle system is now an explicit target for Tehran. Rezaei alleged that the US Central Command, with support from the United Arab Emirates military, was utilizing smaller vessels to transfer oil to larger tankers. He claimed that Iran had been targeting five to six participating vessels nightly for weeks, asserting, "You are smuggling, but the strait is under Iran’s control, and we manage it." This statement appeared to be a direct challenge to US President Donald Trump, who has previously highlighted energy exports reaching pre-war levels.

Rezaei suggested that Iran aims for sustained authority over Hormuz and promised a severe response if Iran's energy and civilian infrastructure were attacked again. His threats extended to Arab regional states, including a warning about potential targeting of digital infrastructure, such as US-linked cables, data centers, and artificial intelligence facilities in the UAE and around the Strait of Hormuz. Rezaei also accused Saudi Arabia of aiding the US in circumventing Iran's oil restrictions, though he did not threaten a direct attack on Riyadh, which is currently facing attacks from Yemen's Tehran-aligned Houthis.

Earlier in September, Iran's Islamic Revolutionary Guard Corps (IRGC) had threatened tankers at ports and anchorages in Kuwait and Bahrain, citing US attacks on Iranian tankers and accusing these countries of complicity through hosting US forces. Iran maintains that the US has accepted some of Tehran's seven conditions for the full reopening of the Strait of Hormuz and the cessation of the war, but insists that a comprehensive deal requires all its demands to be met. Hamidreza Azizi, a senior Iran analyst at the Crisis Group, commented that this stance reflects Tehran's assessment of having sufficient leverage through its control of Hormuz to avoid immediate pressure for an agreement, while also questioning Iran's capacity to sustain this pressure given its own economic costs.

The shuttle system involves large crude carriers (VLCCs) and smaller vessels coordinating with the US military to load crude oil at Arab ports and utilize southern corridors near Oman's coast to exit the strait. To minimize the risk of Iranian targeting, vessels often disable their transponders and operate at night. Following ship-to-ship transfers in the Gulf of Oman, some vessels return for additional loads. Multiple vessels were reportedly targeted on Sunday night into Monday, including two outbound tankers and one vessel near Oman's port city of Sohar, where ship-to-ship transfers are allegedly occurring. Projectile attacks on other vessels last week indicate that the disruption efforts have extended beyond the Strait of Hormuz to target the shuttle system itself.

The IRGC has also promoted the narrative that naval mines, believed to have been deployed in the Strait of Hormuz since the war's inception, pose a significant threat to vessels navigating the waterway without coordination with Iran’s Persian Gulf Strait Authority. The IRGC reported that three tankers sustained major damage over the weekend from mine strikes and released footage of a ship ablaze, purportedly hit by a mine, although the footage did not clearly show a mine detonation. This shuttle system has provided national oil companies in Arab states with an alternative route out of Hormuz via the southern corridor near Oman.

Michelle Wiese Bockmann, a senior maritime intelligence analyst at Windward, described the system as highly effective, noting that under international maritime law, vessels have the right of transit passage. She explained that Oman has facilitated this passage with US military assistance. Tehran asserts that shipping will remain disrupted as long as the US maintains its naval blockade against Iran and intensifies efforts to counter Arab states' oil exports. According to Windward, at least 15 ships are believed to have been targeted in October alone. Bockmann observed that the greater the effectiveness of the route in facilitating oil and gas transport, the less leverage Iran holds over Hormuz, leading to increased attacks on vessels using the southern corridor.

Windward data indicates that 31 ships transited the Strait of Hormuz daily in the final week of September, a significant decrease from the 138 ships per day before the war. Tankers constituted 87% of the 45 ships targeted by Iran in the third quarter of 2026, with approximately 47% belonging to Gulf Arab energy companies' national shipping fleets. Ninety-three percent of these strikes occurred within the Strait of Hormuz, primarily targeting vessels with disabled transponders transiting the southern corridor. These attacks have led to a substantial increase in freight costs, now representing 25-30% of Gulf crude's cost, compared to 1-3% before the war. National oil companies have resorted to offering discounts of up to $35 per barrel below official selling prices due to a shortage of tankers willing to undertake the perilous journey. An estimated 15-20% of very large crude carriers (VLCCs) are currently engaged in an inefficient logistics system reliant on shuttle transfers, further complicated by escalating attacks and risks at loading ports and anchorages. Bockmann concluded that these developments are causing cascading impacts on freight rates and values globally across all vessel classes.