Oil flows through the Strait of Hormuz are increasing despite the ongoing war. The scale of hidden shuttle oil transportation through the strait is becoming increasingly noticeable.
For months, the United Arab Emirates has led the transportation of oil through this waterway, trying to avoid Iranian attacks to supply oil to a market that has experienced significant disruptions due to the war with Iran. The Abu Dhabi National Oil Co. (ADNOC) from the UAE stated in recent weeks that it is doing everything possible to ensure supplies, adding that the situation for its vessels and crews is far from normal.
Increased exports by Persian Gulf countries
The United Arab Emirates is not the only country shipping oil through Hormuz. Other countries have also been exporting quietly—from Iraq to Qatar and Kuwait. Last week, Saudi Arabia appears to have joined them, as its alternative export route through the Red Sea is under threat of Houthi attacks. Collectively, these supplies are already forming significant volumes.
The publication Axios reported over the weekend that about 40 ships passed through the strait on the southern route along the coast of Oman on Friday evening. According to the publication, this amounted to about 16 million barrels of oil, which is approximately four-fifths of the usual pre-war supply volume.
Shipments through Hormuz are usually carried out in convoys under the protection of American military forces. This means that supply volumes can fluctuate significantly depending on the day, so weekly average indicators are more important for assessing how much oil passes through the strait than large volumes on a single day.
Political sensitivity and increasing flows
The flows remain a sensitive political issue. The United States seeks to show that supply volumes are as close to normal as possible, as President Donald Trump tries to pressure the market to contain oil prices, and Iran insists that it controls this key sea passage.
However, while vessels are actively transporting cargo off the coast of Oman, there are signs that flows through Hormuz have indeed accelerated in recent weeks and continue to grow.
Meanwhile, the oil market has already used up reserves that were previously blocked at sea to meet high summer demand, so the increase in supplies through the Strait of Hormuz could have come just in time.
Source: Bloomberg
