Dire Straits? Not for Gulf oil as flows top prewar mark

October 21, 2026 (MLN): Oil shipments from the Persian Gulf have risen above their prewar levels, as a makeshift shipping arrangement backed by the US helps tankers get crude through the Strait of Hormuz despite one of the fiercest waves of Iranian attacks yet.

Middle East oil flows, covering Hormuz cargoes and alternative regional routes, averaged over 24mn barrels per day (bpd) in the week ended Oct 18, compared with 23.3mn bpd before the war, ship-tracking firm Kpler data showed.

The Wall Street Journal, in a report titled More Oil Is Now Coming Out of the Persian Gulf Than Before the Iran War, said preliminary estimates put Hormuz flows, including ship-to-ship transfers in the Gulf of Oman, at about 14mn bpd over the same period, or 82% of prewar volumes.

Brent crude has stayed elevated, rising in recent days to around $108 per barrel on Tuesday, while traders fear the gains may not last, especially if hostilities resume.

Shrinking global inventories leave little room for error, and the costs of the operation are ultimately passed on to consumers at the pump.

The report said the steady flows point to a shift in the contest over the world’s most vital energy chokepoint.

Iran can still make passage risky and costly, but its capacity to deter transits has weakened, eroding Tehran’s leverage over Washington.

Hamad Hussain, senior commodities economist at Capital Economics, said the shipping system through the strait is now well entrenched and the risk appetite of oil exporters has grown.

Pipelines in Saudi Arabia and the UAE are also carrying crude along other routes. Kpler estimated that around 40% of non-Iranian crude leaving the Gulf in September bypassed the strait, up from 17% before the war. Iran’s own exports, by contrast, remain choked by a US maritime blockade.

The report warned Tehran could try to regain influence by escalating its strikes and possibly pulling the US into a fresh confrontation ahead of US midterm elections in two weeks.

Violence around the strait has intensified.

A WSJ tally, drawn from UK Maritime Trade Operations Centre reports and maritime security firms, counted about 30 attacks on ships this month.

Michelle Wiese Bockmann, senior analyst at maritime intelligence firm Windward, said October incidents make up 20% of all ships attacked during the war.

Christopher Long, a former British naval officer now with Neptune P2P Group, said Iran is trying to reimpose its blockade of the strait.

Even so, the economics favour the risky crossing.

Homayoun Falakshahi, Kpler’s head of crude oil analysis, estimated traders can earn $20 per barrel more than before the war by reselling Iraqi crude, or roughly $40mn on a supertanker cargo.

Three such voyages could cover the $100mn cost of a secondhand tanker.

Sailors are also being offered pay of two to three times their usual monthly salary, with one China-based staffing firm offering up to $25,000 for a round trip that typically lasts one to two weeks. Some shipowners are moving older vessels that once carried Venezuelan and Russian oil into the Gulf, drawn by record tanker rates.

Many ships are running short shuttle trips through the danger zone, with US air cover along a corridor off Oman’s coast.

Tankers load inside the Gulf and pass through Hormuz, often with tracking signals switched off, before handing cargoes to vessels bound for distant markets near Oman and returning to the Gulf, where the risk of being hit is highest.

Iran’s Islamic Revolutionary Guard Corps is using drones and missiles to stop vessels, and has adopted guerrilla tactics similar to those of Yemen’s Houthis, placing spotters on small fishing boats and sending fighters onto the water.

The risks are real. The Tanzania-flagged supertanker Loyalty, which for years carried Venezuelan crude to China, has entered the Gulf twice since September to load Iraqi oil.

A crew member said it informed the US Navy of each trip and carried security personnel.

In early October it moved 2mn barrels of Iraqi crude to another tanker in the Gulf of Oman before heading back in for a fresh cargo, with the crew sent body armour and helmets for the second run.

On Oct 16, security firm Vanguard said, a rocket-propelled grenade fired from a small boat hit the vessel, tearing a hole in a fresh water tank while it carried 2mn barrels of Iraqi crude.

The attacks are pushing up the cost of moving Gulf oil. Freight for a supertanker carrying Gulf crude to China reached nearly a record $37.37 per barrel this week, Kpler said, while war-risk insurance has jumped to as much as 10% of a vessel’s value from under 3%, according to Windward.

Natasha Kaneva, head of global commodities strategy at JPMorgan, said the problem in April was a shortage of crude, whereas in October it is the cost of transporting it. Hamad Hussain added that Iran would need to act far more aggressively to regain its earlier degree of control over regional oil flows, despite its threats to block neighbours’ exports if it cannot sell its own.

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