Middle East oil exports have climbed back above levels seen before the US-Israel war on Iran began in February, despite Tehran’s attempts to blockade the Strait of Hormuz and attack vessels. Crude exports from the region exceeded pre-war levels on four days in the final week of September, reaching between 19.5 and 22.5 million barrels per day (bpd), according to provisional data from maritime tracking firm Kpler. Before the war, exports averaged about 18 million bpd.
This surge in oil exports from the region has so far largely been attributed to US ships shepherding tankers out of the Strait of Hormuz, coupled with increasing ship-to-ship transfers that reduce the risks of being targeted by Iranian missiles and drones. Meanwhile, the fact that oil prices have remained high has been explained by analysts as the result of still-elevated insurance rates — driven by fears of Iranian attacks — and a market factoring in the possibility of a return to a hot war. But a senior Kpler analyst last week offered a different explanation for the rise in oil exports at high prices.
Gulf countries, she suggested, may be paying Iran to allow their oil through – potentially handing Tehran a significant portion of the value of the cargo. Before the war, one-fifth of the world’s oil and natural gas exports passed through the Strait of Hormuz. Does this explanation hold up, and what does it mean for the war and oil prices?
Michelle Brohard, head of policy and geopolitical risk at Kpler, recently said some countries could be paying Iran for passage through the Strait of Hormuz. But as early as March, the shipping journal Lloyd’s List reported that Iran’s Islamic Revolutionary Guard Corps (IRGC) had already imposed a “toll booth” system to control vessel traffic through the strait. The Trump administration, during the course of the war, has repeatedly said Iran will not be permitted to charge a toll under any potential agreement with Washington.
Closure of the strait has caused global fuel costs to soar and has tested agricultural sectors across the world. Oil is increasingly getting out of the Middle East, marine trackers report. In the last week of September, the seven-day average climbed above the roughly 18 million bpd recorded before the US-Israel war on Iran began in February – the first time since the conflict started.
Kpler said crude exports excluding Iran had also recovered to at least 16.5 million bpd as an average over September. The pattern of increasing oil exports has continued into October. Iraq’s state-owned Oil Tanker Company on Saturday announced that it had transported two million barrels of crude on a very large crude carrier (VLCC) through the Strait of Hormuz, in what its director general said was the company’s first such operation in decades.
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