Gulf crude exports hit 24.6 million barrels a day, Kpler says

Gulf crude exports averaged 24.6 million barrels a day in the week ending 18 October, exceeding their prewar average, market intelligence firm Kpler said in figures cited by Al Jazeera. The rebound eased the supply disruption caused by the US and Israeli war on Iran.

Moving that oil remains expensive. Freight costs reached as much as $40 per barrel in recent weeks, about 10 times the usual rate, data from London Stock Exchange Group (LSEG) shows. LSEG provides financial-market data and infrastructure. Higher insurance premiums and logistical difficulties drove the increase.

United Kingdom Maritime Trade Operations (UKMTO), which issues maritime warnings and incident reports, had logged 32 incidents in October as of 30 October in connection with attacks on commercial vessels. Isabel Figuerola-Ferretti, an oil-market expert at Comillas Pontifical University, said barrels were moving neither smoothly nor reliably and that this should not be read as normalization.

How exporters keep oil moving

Facing the threat of Iranian attacks, shipping lines use shuttle vessels to carry crude through the Strait of Hormuz. The vessels then transfer the oil to waiting tankers off Oman and the United Arab Emirates, reducing the distance any one vessel travels in dangerous waters. More than 70 percent of crude crossing the strait in August used these ship-to-ship transfers, Kpler said.

Producers have also increased exports through pipelines that avoid Hormuz altogether. Saudi Arabia’s East-West pipeline carries oil from eastern oilfields to Yanbu on the Red Sea. The United Arab Emirates' Habshan-Fujairah pipeline provides another bypass route.

Kpler’s figures show how much the share of exports avoiding the strait had grown by September.

Production and stored supplies still lag

The weekly export rebound measures shipments, rather than oil production or stored supplies. Pavel Molchanov, an investment strategist at Raymond James & Associates, questioned whether supply had returned to its prewar trend. Citing the International Energy Agency (IEA), he put September production by Gulf members of the OPEC oil producers' group at 15.8 million barrels a day, or 75 percent of their prewar baseline.

The IEA, an intergovernmental body providing energy data and analysis, also put global oil inventories 509 million barrels below their prewar level after September’s decline. These inventories are stored supplies that can cushion disruptions, rather than a daily flow of oil.

Figuerola-Ferretti said price relief would require durable de-escalation, normal transit and shipping conditions through Hormuz, rebuilt inventories and freight costs returning to normal.

Molchanov said that once the political groundwork was in place, the next steps would be removing mines from Hormuz, bringing shipping crews back to work and restarting production at oilfields that remain shut down.