As Iran and the United States work with mediators to end seven months of hostilities, the reality in the Strait of Hormuz is shifting in ways that could prove to be a game-changer in ongoing negotiations. According to the latest data from tanker-tracker websites, traffic through the key waterway has been steadily increasing, with some estimates putting oil and petroleum flow through the Strait of Hormuz at nearly 80 percent of what it was before the US-Israeli war on Iran began on February 28. This could dent Iran’s leverage in reaching a favourable deal for itself in its attempts to end the fighting, which has seriously hampered its already heavily sanctioned economy, amid the US blockade of Iranian ships and ports.
Despite that, experts believe it would be a mistake to think normality in the Strait of Hormuz is imminent, or that Iran will fold easily despite growing economic hardship. Moreover, oil prices remain high globally, including in the US, where President Donald Trump faces a crucial midterm election that could see his party swept away in both houses of Congress. Tanker insurance costs also remain elevated, and energy flows through Hormuz are still far from secure, suggesting Iran’s leverage may be weakening rather than disappearing.
The latest data from commodity analytics firm Kpler points to a significant recovery in oil exports from the Middle East. Crude exports reached an estimated 16.328 million barrels per day (bpd) in September – their highest level since the war began in late February, the firm reported this week. Flows through the Strait of Hormuz itself were expected to reach about 9.719 million bpd during the month.
Saudi Arabia has driven much of the increase, with its exports rebounding from 2.446 million bpd in August to about 5.4 million bpd in September. Kpler said Middle East crude exports have recovered to just less than 80 percent of their pre-war level. But the figures remain about 3.2 million bpd below the 19.513 million bpd exported in February.
The data also does not include ships crossing Hormuz with their tracking systems switched off, meaning actual traffic could be higher. Prior to the war, an estimated 120-140 vessels crossed through the waterway daily, roughly half of them oil tankers moving approximately 20 million barrels per day. At the height of the fighting, traffic through the waterway collapsed to as few as two tankers a day after Iran effectively closed the strait in retaliation for US-Israeli attacks.
The rebound in oil flow presents a challenge for Tehran. Iran has sought to use its ability to disrupt the Strait of Hormuz – one of the world’s most important energy chokepoints – as leverage against Washington’s military and economic pressure. But if large volumes of oil can continue moving through the strait while Iran itself remains under a US naval blockade, Tehran’s bargaining power could diminish.
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