Middle East Oil Exports Exceed Pre-War Levels Despite Strait of Hormuz Tensions

Non-Iran Middle East oil exports have surpassed pre-war levels, with vessels continuing to transit the Strait of Hormuz, a critical artery for global oil supplies, even as attacks on shipping have escalated. Preliminary data from Kpler indicates that total oil flows, encompassing shipments via Hormuz and alternative regional routes, averaged over 24.5 million barrels per day for the week ending October 18. This figure exceeds the 24.4 million bpd recorded for the week ending February 22, just prior to the commencement of the Iran war.

The reported volumes include transits through Hormuz, net exports from ship-to-ship transfers in the Gulf of Oman, terminal loadings from Fujairah and Oman ports, and Red Sea exports. Crucially, Iranian exports are excluded from this data. Reports suggest that Hormuz oil flows have recovered to approximately 14 million bpd, notwithstanding recent Saudi attacks.

The conflict, which began on February 28 with attacks by the US and Israel on Iran, led to Tehran's retaliation against its Gulf neighbors and oil-carrying vessels transiting the Strait of Hormuz. Despite an Iranian blockade since the conflict's inception, data indicates that approximately 19 commodity vessels are still crossing the strait daily over the last ten days. Prior to the war, the strait saw over 100 ship passages daily, transporting oil, fertilizers, and refined products to international markets. However, Iranian assaults have prompted ship owners to steer clear of the channel.

According to data from the International Maritime Organisation, there have been 116 attacks on ships up to October 20, resulting in 24 fatalities since the conflict began, with a recent increase in these incidents. In parallel, the US is considering measures to permit sanctioned ships to navigate the channel, a move anticipated to boost global market flows.

The term 'dark fleet,' or 'shadow fleet,' refers to a collection of vessels operating outside conventional shipping regulations. These ships employ deceptive practices to transport sanctioned or high-risk cargo, deliberately obscuring their activities to evade detection. The US administration's proposed plan involves investors acquiring and refurbishing idle vessels for the transport of legitimate oil.

Amidst the ongoing Middle East conflict, oil prices remain elevated. Brent crude, the global benchmark for two-thirds of the world's oil, was trading above $110 a barrel, while West Texas Intermediate, the US crude gauge, was approaching $100 per barrel.