Middle East oil exports climb to their highest level since the war with Iran began

Shipments through the Strait of Hormuz and along routes bypassing it reached nearly 80% of prewar levels last week, according to the research firm Kpler¹. The Financial Times put the figure slightly higher, reporting that shuttle services through the strait have brought shipments to more than 80% of the prewar daily average, the highest level since the war with Iran began³.

Flows through the strait were projected to reach about 9.7 million barrels a day as Saudi Arabia sent additional crude from its Gulf terminals, with LNG traffic also picking up⁵. CNN reported that Gulf oil producers, with considerable support from the US Navy, are moving crude through the strait despite Iran’s position there, and that Iran has lost considerable leverage over the waterway⁷.

The picture is not uniform. The Associated Press reported that the strait remains closed and that Iraq has begun importing gasoline through a Syrian port to bypass it⁴, a description that sits awkwardly beside accounts of recovering transit volumes³. Iran said on Tuesday it is awaiting a US response to its proposal for reopening the strait, as regional oil flows continued to recover².

Why it matters to investors

Crude prices were pressured as more oil moved through the strait, easing supply concerns⁶. The war premium in the oil price has been the main transmission channel from the conflict into global inflation, so a restoration of volume toward prewar levels¹ removes pressure from central banks as well as from refiners.

A dollar index rally to a two-month high added to the downward pressure on energy prices in the same session⁶.

The fragility is that the recovery depends on a shuttle arrangement and naval escort rather than on normal transit^3,7. That is a higher-cost, higher-risk way to move the same barrels, and it can be interrupted.

The two published estimates of the recovery differ slightly, at nearly 80% of prewar levels on one measure¹ and more than 80% on another³, so the direction is clearer than the precise level.

What to watch

Watch the US response to Iran’s reopening proposal, which Tehran said it was still awaiting². A negotiated reopening would remove the shuttle premium; a rejection would leave flows dependent on the current arrangement.

Watch Saudi volumes from Gulf terminals, which are doing much of the work in lifting the total⁵, and watch whether workarounds such as Iraq’s Syrian port route are expanded or wound down⁴.