Middle East oil exports climbed back above pre-war levels in late September, reaching up to 22.5 million barrels per day despite Tehran’s blockade efforts in the Strait of Hormuz, according to provisional data from maritime tracking firm Kpler cited by Al Jazeera.
Why Did Middle East Oil Exports Rebound Above Pre-War Levels?
During the last week of September, regional crude exports surpassed pre-war volumes on four separate days. Shipments reached between 19.5 and 22.5 million bpd, according to provisional data from Kpler. Before the US-Israel war on Iran began in February, exports averaged about 18 million bpd.
This surge in exports has largely been attributed to US ships shepherding tankers out of the Strait of Hormuz. Increasing ship-to-ship transfers have also reduced the risks of vessels being targeted by Iranian missiles and drones.
Are Gulf Countries Paying Iran a Secret Toll for Safe Passage?
Michelle Brohard, head of policy and geopolitical risk at Kpler, suggested that Gulf countries may be paying Iran to allow their oil through. This arrangement could potentially hand Tehran a significant portion of the cargo’s value.
I suspect there is a toll that’s being paid, which is giving these ships safe passage,
Brohard said in an interview with energy analyst Rory Johnston, as reported by Al Jazeera.
I also suspect that these countries know that this is unsustainable from a perspective of [the] US escorting [ships], and also unsustainable from them paying Iran 10 percent of their cargo, or 20 percent of their cargo,
she added. So you’re starting to see like what I would call like a race to get out as much as possible, as quickly as possible before the war restarts.
Brohard presented the assertion as speculation rather than an evidence-backed finding, and it has not been independently verified. However, as early as March, the shipping journal Lloyd’s List reported that a toll booth system had already been implemented by Iran’s Islamic Revolutionary Guard Corps (IRGC) to manage vessel traffic. The Trump administration maintained throughout the war that Iran would not be permitted to charge a toll under any potential agreement.
How Much Oil Is Currently Flowing Through the Strait of Hormuz?
Marine trackers report that oil is increasingly getting out of the Middle East. Kpler stated that crude exports excluding Iran recovered to at least 16.5 million bpd as an average over September. The pattern of increasing exports continued into October.
Iraq’s state-owned Oil Tanker Company announced that it transported two million barrels of crude on a very large crude carrier through the Strait of Hormuz. Its director general noted this was the company’s first such operation in decades. Kpler reports that 40 percent of traffic now avoids Hormuz, and most crude that does cross the strait is transferred between tankers offshore, with a large portion moving via pipelines in the United Arab Emirates and Saudi Arabia.
Meanwhile, senior IRGC commander Ali Fadavi disputed suggestions that Iran had lost control of the waterway. He stated on Sunday that only three to four million bpd were travelling along a US-supervised route, describing that amount as negligible compared with pre-war traffic.
Where Do Brent Crude and US West Texas Intermediate Prices Stand Now?
Oil prices have eased marginally as exports recover, and the Group of Seven countries announced a decision to release 100 million barrels of oil from emergency reserves. Brent crude traded at about $101.59 a barrel, down 0.71 percent, while US West Texas Intermediate fell 1.2 percent to about $90.05.
Despite exports from the region resurging, much will depend, longer-term, on the security of energy supplies,
said Susannah Streeter, chief investment strategist at Wealth Club, noting that the situation remains tense. On Monday, the UK Maritime Trade Operations group reported that the IRGC ordered an oil tanker in the Strait of Hormuz to reverse course or face being targeted.
What Do Maritime and Market Experts Say About the Shipping Bottleneck?
Academic Abdul Khalique said Brohard’s speculation of a transit-fee arrangement is plausible but best described as an informal security mechanism rather than a formal maritime levy. The head of the Liverpool John Moores University Maritime Centre told Al Jazeera that no public proof confirms a systematic, state-run Iranian toll system. He noted that the United Nations Convention on the Law of the Sea safeguards transit passage through international straits, rendering formal tolls legally dubious.
Chris Beauchamp, chief market analyst at IG Group, told Al Jazeera that the biggest challenge for oil exports is now the problem of shipping. The shuttle system in the Gulf is doing wonders in getting oil out, but it requires plenty of ships, and that has pushed freight rates higher while also reducing supply beyond the region itself,
he said.
Frequently Asked Questions About Middle East Oil Transit
What was the average daily oil export volume before the war?
Before the conflict began in February, Middle East oil exports averaged about 18 million barrels per day, according to Kpler data cited by Al Jazeera.
How are tankers avoiding missile and drone risks in the Gulf?
Shipments have recovered through US naval escorts shepherding tankers out of the Strait of Hormuz, rising use of regional pipelines through Saudi Arabia and the UAE, and increasing ship-to-ship transfers offshore.
What emergency action did G7 nations take regarding oil supplies?
The Group of Seven countries announced a decision to release 100 million barrels of oil from emergency reserves.
What alternative route has grown in importance during the strait disruptions?
The Red Sea has become an increasingly important alternative transit route for oil supplies moving out of the Middle East.
Worth a look