Gulf Workarounds Keep Oil Flowing Despite Hormuz Threat

When Iran shut the Strait of Hormuz at the start of the war, global markets feared oil prices would surge and disrupt the economy. The strait is vital for shipping about 15 million barrels of crude a day, and the closure raised alarms of a rapid supply squeeze.

Nearly seven months later, crude prices are higher but not at the levels analysts expected. Supply is broadly able to meet current global demand, even as the higher cost of energy creates political pressure for Donald Trump and others.

Alternative Routes Replace Blocked Shipping

Saudi Arabia and other Gulf producers moved quickly to use spare pipeline capacity and reroute exports. When Iran and allied forces then targeted parts of those routes, exporters and the United States used additional contingencies, creating an extended pattern of disruption and adaptation.

Oil is trading at around $100 a barrel, above pre-war levels but below the worst-case scenario. Iran’s ability to apply pressure has weakened as the United States maintains a naval blockade and tightened sanctions that constrain Tehran’s own economy.

Officials and analysts also point to the drawdown of commercial stocks as a factor limiting price spikes. China, in particular, has reduced inventories, helping to keep the market from tightening further.

Pipelines And Detours Keep Exports Moving

Early in the conflict, the Saudis shifted exports to an east-west pipeline linking to the Red Sea port of Yanbu. Tankers then travelled through the Bab el-Mandeb strait towards Asia.

The United Arab Emirates used a separate pipeline route, across Oman to Fujairah, which allows shipments to bypass Hormuz. Both pipelines had spare capacity. During the first weeks of the war, ADNOC and Saudi Aramco used the additional throughput to prevent exports from falling sharply.

Some oil still moved through the Strait of Hormuz, using a United States-supervised corridor near Oman. Ship operators willing to accept the risk of Iranian attack avoided Iran’s preferred route by travelling at night with location systems and mobile phones switched off, then transferring cargo to tankers outside the strait. Flows from Kuwait, Iraq and the UAE increased as a result.

Yemen Disrupts One Route, Forcing New Shifts

In July, Iranian-backed Houthi rebels disrupted the Yanbu workaround. They declared a blockade of Saudi oil shipments, threatening the Bab el-Mandeb route in a way that echoed the earlier Hormuz shutdown.

Saudi Arabia responded by redirecting some Asia-bound shipments towards the Mediterranean. Some moved via the Suez Canal, while larger tankers used a pipeline across Egypt to transfer crude before sea travel around Africa and back to Asia.

Earlier this month, the east-west pipeline was attacked and forced to shut down, potentially for weeks. With loading halted at Yanbu from September 11, Saudi Arabia then shifted again, sending more crude through the U.S.-guided corridor in the Strait of Hormuz.

Shipping data cited by Kpler said six supertankers loaded about 12 million barrels at Saudi terminals in the Persian Gulf on Monday.

Tight Balance, Higher Costs, And More Vulnerability

U.S. officials have highlighted the role of the southern corridor in maintaining energy flows while sanctions and the blockade increase pressure on Iran. Adm. Brad Cooper, head of U.S. Central Command, said U.S. forces assisted 2,000 commercial transits and helped move more than 1 billion barrels of oil from Gulf partner nations over “the past couple of months”.

Analysts estimate that roughly 6 million barrels a day or more have been moving through the dark shuttle route in the Strait of Hormuz, around 40% or more of pre-war flows. Adding pipeline supply to Fujairah, this would restore much of the blocked volume, though about 7 million barrels per day remains missing.

Rystad Energy vice president Rahul Choudhary said the shortfall is largely offset by a drawdown of global inventories, reductions in demand driven by higher prices and slower growth, and additional supply from other producers including the United States. He argued the market is very tightly balanced, which is why prices have not jumped to the $140-$150 range that would indicate a larger deficit.

Even so, the workarounds are costly and may not be sustainable. Voyages through the Suez Canal can add up to a month, and Hormuz shuttle transfers require tankers to wait for at least a day and a half in the Gulf of Oman. Charter rates have surged from typical levels of $30,000 to $50,000 per day to spot rates that reached $1 million per day for Hormuz transits on September 11, according to Windward—equivalent to about $26 per barrel.

Markets are also braced for further disruptions. The pipeline attack showed infrastructure can be vulnerable. Analysts said Iran could target the U.S. route through Hormuz or areas near the Omani coast where ship-to-ship transfers take place, which would push tankers to transfer even farther away, extending delays and increasing costs.

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24 September 2026