Gulf Nations Keep Oil Flowing Despite Closure of the Strait of Hormuz
Despite Iran closing the Strait of Hormuz, Gulf countries are keeping oil on the market through alternative pipelines and US-monitored corridors.
Although Iran blocked the daily shipment of 15 million barrels of oil by closing the Strait of Hormuz at the start of the war, Gulf nations have managed to maintain oil flow through alternative pipelines, US-monitored routes, and inventory depletion methods.
Closure of the Strait of Hormuz
With Iran closing the Strait of Hormuz at the beginning of the war, the maritime transport of approximately 15 million barrels of oil per day was blocked, raising fears that the global economy would suffer.
However, over the nearly seven months that have passed, although prices have risen, they have not reached extreme levels, and sufficient oil supply has been provided to meet global demand.
Use of Alternative Pipelines
Saudi Arabia activated its East-West pipeline leading to the Yanbu port on the Red Sea to begin shipments to Asia and utilized its idle capacity.
The United Arab Emirates also prevented exports from coming to a complete halt by using its pipeline extending to Fujairah via Oman, bypassing the strait.
US-Monitored Routes
Starting in May, vessel operators willing to take on the risks carried out covert shipments during nighttime hours by using the US-monitored route near Oman.
Oil flows originating from Kuwait, Iraq, and the UAE began to increase again thanks to these dark service routes.
Houthi Threats and New Routes
When Yemen's Houthis threatened the Bab el-Mandeb Strait in July, Saudi Arabia redirected shipments through Egypt to the Mediterranean.
Following the attack on and closure of the East-West pipeline at the beginning of the month, Saudi Arabia returned to making shipments from terminals in the Persian Gulf.
Global Supply Balance and Prices
With the depletion of inventories and a drop in demand, the market deficit was largely closed, and crude oil prices stabilized around $100 per barrel.
Experts note that although alternative routes are costly and time-consuming, they are currently preventing the global energy crisis from deepening.