Key Points
- Kuwait and Qatar have restored crude exports to 70% of their combined pre-war level.
- Daily oil flows through Hormuz have risen to 7-8 million barrels from four million in mid-July.
- The additional Gulf supplies are helping keep global oil prices below their April peaks.
The latest
Kuwait and Qatar are sending more crude through the Strait of Hormuz, restoring shipments to about 70% of the combined 2 million barrels a day they exported before the Iran war. Their return has added to a broader recovery in Gulf oil flows through the strategic waterway, despite the risk of Iranian attacks and the steep cost of securing tankers willing to make the crossing.
Details
- Flow recovery: About 7 million to 8 million barrels of oil a day are now exiting Hormuz, traders said, up from roughly 4 million in mid-July and equal to about three-quarters of pre-war levels. Vortexa separately put the seven-day average near 10 million barrels a day on Monday.
- Regional exporters: The United Arab Emirates was the first Gulf producer to move large volumes through Hormuz using ship-to-ship transfers in the Gulf of Oman. Saudi Arabia later joined after Houthi attacks on tankers in the Red Sea forced it to rely more heavily on the strait.
- Kuwaiti fleet: Kuwait began shuttling cargoes around June and has mainly relied on its own fleet of 11 supertankers. Most of those vessels have transmitted no satellite signals for more than two months, indicating their transponders were switched off or the ships had gone dark.
- Additional sales: The restored flows have allowed Kuwait to offer cargoes on the spot market alongside volumes committed to long-term customers in East Asia. A Kuwait Petroleum Corp. supertanker was struck while crossing the chokepoint earlier in August, Kuwait said in representations to the UN shipping watchdog.
- Qatari cargoes: Commercial tankers have generally carried Qatar’s oil, while TotalEnergies said it was among the biggest carriers of Qatari barrels. QatarEnergy this week offered crude for sale through ship-to-ship transfers outside Hormuz in the Gulf of Oman after increasing shuttle volumes since around June.
- Market impact: The increased shipments come as Washington and Tehran remain deadlocked over the Iran war, with control of Hormuz the central point of contention. Brent crude is trading near $87 a barrel, down from more than $120 in late April.
- Producer responses: Kuwait Petroleum Corp. and QatarEnergy did not respond to requests for comment, while several calls to Kuwait’s oil ministry went unanswered. Traders discussing the export levels requested anonymity because they were not authorized to speak publicly.
Background
The shuttle trade emerged because few vessels were prepared to accept the risks of transiting Hormuz. Gulf producers consequently used their own fleets or hired tankers willing to cross at exceptionally high rates, before transferring the cargoes to other ships in the Gulf of Oman for onward delivery.
What’s next
The next seven-day flow reading will show whether Hormuz shipments remain near 10 million barrels a day and whether Kuwait and Qatar move beyond 70% of their pre-war exports.
