Gulf oil flows top their pre-war level even as new Hormuz attacks lift prices

More oil is now coming out of the Persian Gulf than before the Iran war³. Flows through the Strait of Hormuz and alternative export routes averaged more than 24 million barrels a day in the week through 18 October, above the pre-war level^2,3.

Prices rose anyway. Oil advanced as attacks in the Strait of Hormuz continued to menace global supplies, though flows through the waterway remain robust¹. Oil prices also rose as Hormuz shipping risks persisted².

The latest incidents were attacks on a tanker near the strait and on Saudi Arabian facilities by Iran-backed Houthis⁴. Traders were assessing those developments as prices climbed⁴.

Why it matters to investors

The figures separate two things that are often treated as one: the volume of oil reaching the market and the price of getting it there. Volume has recovered past its pre-war level^2,3. Risk has not eased, and attacks continue^1,4.

Cost is the link between the two. The International Energy Agency said that while attention has focused on the availability of Gulf crude and the reopening of trade routes through Hormuz, freight costs have risen⁶. In the agency’s account, the soaring cost of shipping is lifting the price of oil for consumers⁶.

Oil prices have soared because of the Iran war, and fuel costs have followed, along with the risks of transiting the strait⁵. For consumers and companies that buy fuel, that means higher prices even when barrels are available^5,6.

For energy investors, the persistence of flows limits the case for a supply shock, while the attacks keep a risk premium in the price^1,2. The two forces pull in opposite directions, and both are visible in this week’s trading⁴.

What to watch

The first indicator is the weekly flow data. Volumes above the pre-war level² would be tested by any escalation that closes alternative routes or slows traffic through Hormuz¹.

The second is the pattern of attacks, both on tankers near the strait and on Saudi facilities⁴. A widening of those attacks would test how robust the flows really are¹.

The third is freight. The IEA’s point is that shipping costs, not only the availability of crude, decide what consumers pay⁶. A fall in those costs would ease pump prices even if the risk to supply remains^5,6.