Middle Eastern oil exports have exceeded prewar levels despite Iranian attacks on shipping, thanks in part to U.S. protection, offshore cargo transfers, and pipeline transfers.
Tanker charges, insurance costs, and crew bonuses are driving up Gulf oil prices.
A U.S. Navy F/A-18F Super Hornet, assigned to the “Black Knights” of Strike Fighter Squadron (VFA) 154, lands on the flight deck of Nimitz-class aircraft carrier USS Theodore Roosevelt (CVN 71), July 24, 2025. Theodore Roosevelt, flagship of Carrier Strike Group (CSG) 9, is underway conducting exercises to bolster strike group readiness and capability in the U.S. 3rd Fleet area of operations. (U.S. Navy photo by Mass Communication Specialist 3rd Class Aaron Haro Gonzalez)
(Aug. 8, 2017) The Nimitz-class aircraft carrier USS George H. W. Bush (CVN 77) at sea during exercise Saxon Warrior 2017, Aug. 8. Saxon Warrior is a United States and United Kingdom co-hosted carrier strike group exercise that demonstrates allied interoperability and capability to respond to crises and deter potential threats. (U.S. Navy photo by Mass Communication Specialist 1st Class Theron J. Godbold /Released)
Exports are up as pipelines bypass Hormuz.
The Big Picture on Strait of Hormuz and Iran
Regional oil flows averaged over 24 million barrels daily in the week to October 18, compared with an average of 23.3 million barrels before the war, The Wall Street Journal reported, citing Kpler.
Preliminary estimates show Hormuz flows, including offshore transfers in the Gulf of Oman, at about 14 million barrels daily, or 82% of prewar levels.
The regional total includes alternative routes.
“The big picture is that the system for shipping through a dangerous Strait of Hormuz is now well-established and the risk appetite of those involved in exporting oil has risen,” said Hamad Hussain, senior commodities economist at Capital Economics.
Saudi and Emirates pipelines helped 40% of non-Iranian Gulf crude exports bypass Hormuz in September, compared with 17% prewar, estimated Kpler.
“Of course, we do wish and hope to see a resolution to the conflict … But Hormuz, probably in five years, may become redundant,” HSBC CEO Georges Elhedery said on Tuesday, alluding to future expanded routes.
$40 Million Cargoes Draw Tanker Owners
Some older tankers are making short shuttle trips through Hormuz under American air cover off the coast of Oman, transferring cargoes offshore to serve distant markets, then returning for more oil, the Journal reported.
Kpler’s Homayoun Falakshahi estimated traders could make an additional $20 per barrel reselling Iraqi crude, or approximately $40 million per supertanker cargo.
“The volumes remain high despite rising attacks, because profits make it worth the risk,” he said.
Crews are getting bonuses, too: one Chinese staffing firm offered up to $25,000 for a round trip.
The tanker Loyalty, with 2 million barrels of Iraqi crude aboard, was hit October 16 by a rocket-propelled grenade that pierced a freshwater tank, the Journal, quoting maritime security firm Vanguard and a crew member, said.
Shipping Attacks Are Underreported
“Iran is trying to reassert its blockade of the strait,” former British naval officer Christopher Long told the Journal.
UK Maritime Trade Operations noted 12 attacks in its October 16 weekly report, including 10 in Hormuz. It said it was “struggling to accurately report true number of attacks” as most attacked vessels did not report incidents.
UKMTO tracked 254 crossings through Hormuz in the seven days to October 14, down some 70% on prewar figures—it combined that data on shipping movements with data reported by the United States.
In its report yesterday, the Joint Maritime Information Center rated the threat in the strait as “SEVERE” and said deliberate hostile action was highly likely.
The U.S. naval blockade of Iranian ports continued.
By October 21, the International Maritime Organization had verified 119 incidents in the region and 24 seafarer deaths.
“Seafarers have continued to perish in these attacks, and around 6,000 seafarers remain trapped since the beginning of the conflict,” IMO Secretary-General Arsenio Dominguez said to Fox News Digital on Sunday.
Freight and Insurance Costs Rise
Kpler estimated the cost of shipping Gulf crude to China by supertanker at nearly $37.37 a barrel this week, the Wall Street Journal said.
War-risk insurance climbed to as much as 10% of a vessel’s value, up from less than 3%, Windward analyst Michelle Wiese Bockmann said.
“In April, the problem was a shortage of crude. In October, it is the cost of moving it,” JPMorgan’s Natasha Kaneva said in the Journal.
Brent crude futures jumped 1.9% to $110.85 a barrel by 10:48 a.m. GMT on Wednesday, Reuters said.
“Neither of the two geopolitical conflicts underpinning the market’s bullish sentiment has shown any signs of de-escalation,” PVM analysts said, referring to the wars in the Middle East and Ukraine.
Middle Eastern refined product exports hit 1.9 million barrels a day in September, still just 40% of the prewar figure of 4.7 million.
The agency expected refinery output to rise but said: “the gasoil market balance will remain tight well into 2027.”
“Iran would have to be more aggressive to achieve the same degree of control it previously possessed over oil flows from the region,” Capital Economics economist Hamad Hussain told the Journal.
About the Author: Georgia Gilholy
Georgia Gilholy is a journalist based in the United Kingdom who has been published in Newsweek, The Times of Israel, and the Spectator. Gilholy writes about international politics, culture, and education.
