• Middle East oil exports rose above prewar levels in the week through Oct. 18, averaging over 24 million barrels per day, according to Kpler.
  • A U.S.-protected shipping system and alternative routes are keeping tankers moving, but the Strait of Hormuz remains below prewar throughput.
  • Oil prices stay elevated as shipping costs surge, inventories tighten, and traders fear renewed escalation.

Exports Recover, But Risks Persist

Oil exports from the Persian Gulf have climbed above prewar levels, a sign that a makeshift shipping system is succeeding in moving crude despite continued attacks in the Strait of Hormuz. Regional exports averaged more than 24 million barrels per day in the week through Oct. 18, compared with a prewar baseline of 23.3 million, according to Kpler figures reported by The Wall Street Journal (NWSA)—a roughly 3% increase.

Yet the headline number masks a fragile reality. Flows through the Strait of Hormuz, including offshore transfers in the Gulf of Oman, averaged approximately 14 million barrels per day—only 82% of prewar levels. The recovery is not a full restoration of the vital waterway; rather, it reflects a reconfiguration of logistics that separates the most dangerous part of the voyage from long-distance delivery.

A Patchwork of Protection

The emerging system relies on shuttle tankers loading inside the Gulf and crossing Hormuz under U.S. air cover along the Omani coast. Those cargoes are then transferred offshore near Oman to other tankers bound for distant markets. Meanwhile, pipelines from Saudi Arabia and the UAE provide alternative routes that avoid Hormuz altogether. In September, about 40% of non-Iranian Gulf crude exports bypassed the strait, up from 17% before the war.

Attacks continue to test the system. The Journal counted approximately 30 attacks on ships during October, drawing on maritime-security reports. Tankers are nevertheless sailing because military protection and unusually large trading profits make some operators willing to accept the risk. “The willingness to take risk is higher when the reward is high,” said one shipping analyst, who spoke on condition of anonymity to discuss sensitive security matters.

Why Oil Prices Remain High

Despite the export recovery, Brent crude traded at $110.11 a barrel at 07:47 GMT on Oct. 21, up 1.2%, as shipping attacks, stalled diplomacy, and falling U.S. inventories outweighed the positive export news. Three factors explain the apparent contradiction:

  • Transportation costs: Gulf-to-China supertanker freight approached $37.37 per barrel this week, according to Kpler. War-risk insurance reached as much as 10% of vessel value, according to Windward.
  • Depleted inventories: The IEA estimated global observed oil stocks at the end of September were 509 million barrels below end-February levels. A single strong export week cannot replenish months of losses.
  • Continued disruption risk: Attacks and limited diplomatic progress keep supply fears alive. Traders are pricing the possibility of future interruptions, not just current shipments.

The IEA also noted a distinction between oil available on land and oil still traveling. September’s modest 10-million-barrel decline in total observed stocks concealed a 113-million-barrel fall in on-land inventories, largely offset by more oil at sea. Exported oil is not necessarily oil already available to refiners.

Who Gains, Who Loses

Gulf producers benefit from restored access to customers, though higher logistics costs and security risks complicate the value of those sales. Some traders and shipowners are earning exceptional returns. Kpler estimated that the additional resale margin on Iraqi crude could reach $20 per barrel compared with before the war—about $40 million on a two-million-barrel cargo.

Refiners outside North America face pressure. The IEA says tighter crude markets and record freight rates have crushed refining margins. Consumers and oil-importing economies remain exposed to expensive fuel and inflation pressure. The higher cost of moving Gulf oil ultimately feeds through to pump prices, according to the Journal.

A Delicate Balance

Washington is pursuing two objectives simultaneously: protecting other Gulf countries’ exports and restricting Iran’s oil revenue through a maritime blockade. Secretary of State Marco Rubio has described that strategy publicly, though claims about its effectiveness should be distinguished from independently measured shipping data.

The resulting political balance is unstable. U.S. protection and alternative routes reduce Iran’s ability to stop regional oil exports, but continued Iranian attacks demonstrate that Tehran can still impose costs. Greater shipping resilience could weaken Iran’s bargaining leverage—but also create an incentive for more forceful attacks. Capital Economics economist Hamad Hussain warned that Iran would need to become more aggressive to regain its earlier control over regional oil flows.

The immediate policy dilemma is not simply whether the waterway is “open.” It is whether governments can maintain commercially viable passage without allowing protection operations and attacks to trigger a wider confrontation.

Human and Economic Costs

Seafarers bear the most direct human risk. Reporting describes crews receiving body armor and helmets, alongside bonuses of two or three times normal monthly pay for dangerous voyages. One staffing offer reached $25,000 for a round trip. Those incentives show how the system is recruiting crews; they do not mean the danger has disappeared. The tanker Loyalty, after carrying Iraqi crude and transferring cargo offshore, was reportedly struck by a rocket-propelled grenade on Oct. 16, damaging a freshwater tank while carrying another two million barrels of crude.

For the wider public, the main issues are fuel affordability, crew safety, and the risks of prolonged military involvement. The reporting reviewed documents these stakeholder pressures but does not establish a representative public-opinion trend or polling consensus.

What to Watch

In the short term, the most defensible outlook is continued volatility rather than an immediate return to cheap oil. Capital Economics sees a more established shipping system and greater willingness to accept risk, supporting continued exports. JPMorgan (JPM)’s Natasha Kaneva characterizes the shift as moving from a crude shortage in April to a transportation-cost problem in October. The IEA expects inventory drawdowns to accelerate in October, leaving less protection against another disruption.

The pivotal risk is a successful attack on the infrastructure supporting the workaround—transfer areas, tankers, or alternative export routes—not only a shutdown inside Hormuz itself. Reuters (TRI) reported Oct. 21 that LSEG (LSEG.L) analysts were warning about Iranian attacks extending into the Gulf of Oman, threatening the offshore transfers supporting the recovery.

Longer term, if the conflict persists, the present adaptations could encourage greater reliance on bypass pipelines, offshore transfer networks, and specialized high-risk tanker operators. The fact that the bypass share has already risen from 17% to about 40% shows the direction of adjustment. Shipbrokers report older vessels previously carrying Russian and Venezuelan oil moving into Gulf trades to capture exceptional rates. And Reuters reported an industry estimate of a 4.9-million-barrel crude draw for the week ending Oct. 16, with gasoline and distillate stocks also falling—preliminary API figures, not official government data.

The evidence supports a narrower conclusion than “the crisis is over”: the region has become better at exporting oil through a conflict, while the cost, human exposure, and risk of renewed disruption remain unusually high.

Correction: Oct. 22, 2026 — An earlier version of this article misstated the week in which regional exports exceeded prewar levels. It was the week through Oct. 18, not Oct. 11.