What happened
Oil exports have reached pre-war levels despite Iranian attacks on tankers in the Strait of Hormuz. According to maritime tracking agency Kpler, total oil flows have reached 24.5 million barrels per day, surpassing pre-war levels. This is due to the use of alternative shipping routes and methods, such as the Red Sea transit route, which some Gulf producers have turned to in response to Iranian attacks.
The US and its allies have found ways to maintain oil flows, including the use of convoys and ship-to-ship transfers. The International Energy Agency (IAE) noted that the United Arab Emirates (UAE) has been particularly successful in moving oil despite Iranian threats, possibly due to its ownership of many tankers and its high-capacity pipeline that bypasses the Strait of Hormuz.
Despite the resilience of Middle Eastern oil flows, the cost of oil remains high, with the benchmark Brent crude hovering over $100 per barrel. This is partly due to increased shipping and insurance expenses. The high price of oil has made it worthwhile for ship owners to endure the risk of Iranian terrorism, with oil from Iraq currently fetching about $20 per barrel more than it did before the war.
The US is considering a new strategy to increase Hormuz oil flows, including allowing new investors to buy sanctioned vessels from the "shadow fleet" and rehabilitate them into legitimate crude oil transports. This could provide a substantial shipping resource, with experts believing the "shadow fleet" includes over 1,600 ships.
