Gulf Nations Keep Oil Flowing Amid Iran-War Disruptions

When Iran closed the Strait of Hormuz at the war’s outset, roughly 15 million barrels per day were blocked. Gulf exporters quickly shifted oil to spare capacity on Saudi Arabia’s East-West pipeline to the Red Sea port of Yanbu and the United Arab Emirates’ pipeline across Oman to Fujairah. After Iranian-backed Houthi rebels disrupted the Yanbu route in July, Saudi shipments were rerouted northwest through the Mediterranean or via an Egyptian pipeline, forcing a long detour around Africa. By early September, six supertankers loaded about 12 million barrels at Saudi terminals, and a U.S.–supervised “dark shuttle” corridor near Oman resumed night-time ship-to-ship transfers, restoring an estimated 6–7 million barrels per day through the southern route plus 2 million barrels via the Fujairah pipeline.

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

The alternative routes add significant expense. Sending oil to Asia through the Suez Canal can extend voyages by up to a month, while ship-to-ship transfers in the Gulf of Oman require tankers to wait 36 hours, inflating charter rates to about $1 million per day—about $26 per barrel, or roughly a quarter of the oil’s price. Spot charter rates for standard supertankers have surged to $30,000-$50,000 per day.

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

Energy-data firm Rystad Energy’s vice-president of upstream research, Rahul Choudhary, calculated that about 8 million barrels per day of the pre-war shortfall have been restored, while global inventories and reduced demand offset the remaining gap. He noted, “Our take is that the market is very tightly balanced,” — Rahul Choudhary “Our take is that the market is very tightly balanced.” Consequently, crude trades around $100 a barrel—higher than before the conflict but far below the $140-$150 range that would have resulted from a 5-6 million-barrel deficit. Rystad projects prices near $85-$90 per barrel for the year’s final quarter, falling to $80-$82 next year if Hormuz reopens.

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

U.S. Central Command head Adm. Brad Cooper said U.S. forces have facilitated roughly 2,000 commercial ship transits and moved more than 1 billion barrels of oil for Gulf partners over the past several months, emphasizing the strategic role of the southern corridor in sustaining energy flows while the U.S. blockade pressures Iran.

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

• Pre-war Hormuz flow: ~15 million barrels/day (blocked)

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

• Restored flow: 6-7 million barrels/day (southern route) + 2 million barrels/day (Fujairah pipeline) ? 8 million barrels/day

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

• Global inventory drawdown: ~3.5 million barrels/day

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

• Demand reduction: ~5 million barrels/day due to higher prices and slower growth

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

• Current crude price: ~US$100/barrel; projected $85-$90/barrel (late 2026)

Gulf nations have found ways to keep oil flowing through the Iran war, but the costs are mounting

These adaptations have kept the global oil market from a severe shortage, though the workarounds remain expensive and vulnerable to further attacks.

South China Morning Post