• Vice President J.D. Vance's remark that "oil is still flowing" is technically true, but Strait of Hormuz traffic has plummeted to a fraction of pre-war levels.
  • Only 17 trackable commodity vessels transited the strait over the weekend, down from 37 a week earlier and far below the pre-war daily average of 125.
  • Some exports are continuing via tankers with transponders off and offshore transfers, leaving actual flows opaque and markets on edge.

A Reassurance That Masks a Broken Supply Chain

Vice President J.D. Vance's reported comment that "oil is still flowing" offers a narrow reassurance: Gulf energy exports have not stopped outright despite the U.S.–Iran conflict. But the data tells a more troubling story. Visible shipping through the Strait of Hormuz remains severely disrupted, and actual flows are increasingly opaque because some tankers are operating with transponders switched off.

According to a Reuters report dated September 21, only 17 trackable commodity vessels transited Hormuz over the weekend, compared with 37 the prior week. That is a sharp reduction from the approximately 125 large commercial vessels per day that used the route before the U.S.-Israeli war with Iran began on February 28.

Yet oil and gas shipments are still leaving the Gulf. In the week of September 13, 22 tankers—mostly very large crude carriers—carried roughly 42 million barrels of crude out through Hormuz. Saudi Arabia and Iraq each accounted for 43% of that volume.

Dark Voyages and Offshore Transfers

Some cargo is being moved in less transparent ways. Middle Eastern producers continue exporting on tankers whose transponders are off, according to Reuters, which documented a transfer of 2 million barrels of Iraqi Basrah crude from the VLCC Pinios to the New Constant off Fujairah, UAE. The latter is expected to head to China.

LNG movements have also continued: the Shandong Redwood, carrying LNG loaded at Qatar's Ras Laffan terminal, exited Hormuz on September 19 and was heading to Pakistan.

The recovery is uneven. On September 16, only four trackable vessels transited Hormuz in one day—far below the then-10-day average of 18—and no VLCCs or LNG tankers were recorded among them.

The strait had carried about one-fifth of global oil and LNG supply before the war, so even a partial interruption creates a material risk premium for energy markets and supply chains. Saudi crude exports have recovered to more than 4 million barrels per day so far this month, but Houthi attacks on the Kingdom's East-West Pipeline—an alternative export route to the Red Sea—have pushed Saudi Arabia to raise exports through Hormuz instead.

"What institutional investors like us are really focused on is regulatory stability," said Andrea Valeri, Blackstone (BX)'s country chairman for Italy, speaking at a Bloomberg conference in Milan on Thursday. While Valeri's comments addressed Italy's investment climate, his emphasis on stability resonates in a region where regulatory and security certainties are fraying.

Asian importers are especially exposed. China is the expected destination for the Iraqi crude transferred off Fujairah, while Pakistan is receiving the Qatar LNG cargo. Disruptions could raise delivered energy costs, freight rates, and insurance costs across Asian markets.

Alternative routes are constrained. The Bab el-Mandeb passage at the southern end of the Red Sea also saw lower weekend traffic—51 crossings, versus 57 in the previous weekend—and no visible loadings from Saudi Arabia's Yanbu port since September 16. This limits the effectiveness of shifting exports away from Hormuz.

Political Stalemate Keeps Markets on Edge

The headline sits within a military and diplomatic stalemate between the United States and Iran. Gulf tensions persist while the two sides remain at an impasse, Reuters characterizes. The administration's likely objective in emphasizing that oil still moves is to reassure consumers, markets, allies, and oil-importing nations that the conflict has not produced a complete supply cutoff.

But the conflict has turned commercial shipping into a strategic issue. Ships may deactivate tracking systems, follow nonstandard routes, or conduct offshore transfers to reduce exposure or obscure cargo movement, undermining transparency and increasing the risk of miscalculation. Houthi attacks have broadened the regional dimension beyond Iran and Hormuz by hitting Saudi export infrastructure and complicating the Red Sea alternative.

The immediate stakeholders are energy consumers, Gulf producers, shipping crews, insurers, Asian importing countries, and governments trying to prevent a broader regional economic shock. Consumers and businesses may face higher fuel, transport, power, and goods costs if disruptions persist or intensify. Gulf exporters retain revenue opportunities, but at higher logistical and security cost and with less dependable access to markets.

Seafarers and shipping firms bear direct physical-security risks, while insurers and charterers must price uncertainty into voyages. Policymakers face a trade-off between protecting navigation and avoiding actions that broaden the conflict.

The public-policy debate is therefore not whether any oil is moving—it clearly is—but whether the remaining flow is sufficiently stable, safe, and transparent to prevent a sustained energy and shipping shock.

Near term, oil, LNG, and petroleum-product cargoes will probably continue to transit in limited and uneven volumes, aided by dark voyages, offshore transfers, and concentrated use of available secure windows. That avoids an immediate total embargo but leaves markets highly sensitive to attacks, military escalation, or changes in escorts and insurance availability.

Longer term, a prolonged disruption could accelerate investment in alternative pipelines, Red Sea and Arabian Sea terminals, strategic petroleum reserves, diversified LNG sourcing, and naval protection arrangements. Yet the recent damage to Saudi Arabia's alternative East-West route demonstrates that infrastructure diversification alone cannot eliminate regional security risk.

The bottom line is that Vance's statement is accurate in the limited sense that energy exports have not stopped. But current shipping data points to a constrained, improvised, and vulnerable flow—not a return to normal Gulf energy trade.