When Iran shut the Strait of Hormuz at the start of the war, many feared a dramatic rise in oil prices that could hurt the U.S. economy. Seven months later, oil is higher but not soaring, thanks to swift action by Gulf producers and decisive U.S. naval support.
Alternative routes keep crude flowing
Saudi Arabia and the United Arab Emirates quickly shifted oil onto spare capacity in their East‑West pipelines, moving shipments to Red Sea ports such as Yanbu and Fujairah. From there, tankers entered the Bab el‑Mandeb Strait and continued to Asian markets. When Iranian‑backed Houthi rebels disrupted the Yanbu route in July, Saudi exporters rerouted cargo through the Mediterranean and even across Egypt, sending oil around Africa before it returned to Asia.
U.S. forces play a critical role
In September, the Saudis joined other Gulf partners in using a U.S.–guided “dark shuttle” corridor through the Strait of Hormuz. According to shipping data firm Kpler, six supertankers loaded 12 million barrels at Saudi terminals on a single day. Admiral Brad Cooper, head of U.S. Central Command, highlighted that U.S. forces have facilitated more than 2,000 commercial ship transits and moved over 1 billion barrels of oil for Gulf allies in the past few months.
Analysts estimate that 6 million to 7 million barrels per day now travel the southern route, plus an additional 2 million barrels through the Fujairah pipeline—roughly 8 million barrels of the pre‑war 15 million‑barrel shortfall have been restored.
Market balance despite higher prices
Energy‑data firm Rystad Energy’s Rahul Choudhary explains that about 3.5 million barrels per day are being drawn from global oil inventories, while demand has fallen roughly 5 million barrels per day due to higher prices and slower growth in key markets. Adding 0.5 million to 0.7 million barrels per day from other suppliers, including the United States, leaves the global market tightly balanced.
“That is why you are not seeing exceptionally high prices for crude; they are still in the $100 range and have not touched $140‑$150 per barrel,” Choudhary said. Rystad projects oil prices to settle around $85‑$90 per barrel by year‑end and dip to $80‑$82 next year if the Hormuz corridor remains open.
Costs and sustainability concerns
The workarounds are not without expense. Shipping oil via the Suez Canal adds up to a month to voyages, and the Hormuz shuttle requires tankers to wait a day and a half for ship‑to‑ship transfers. Charter rates for supertankers have surged, with spot rates reaching $1 million per day on Sept. 11—about $26 per barrel, making shipping costs a quarter of the oil price rather than the usual 1‑3%.
Recent attacks on the East‑West pipeline underscore the vulnerability of these alternate routes. If Iran intensifies disruptions, Gulf exporters may need to move transfers farther offshore, further increasing time and cost.
Administration’s response
President Trump’s administration has praised the collaborative effort between U.S. forces and Gulf partners, emphasizing that the continued flow of energy protects American consumers and supports global stability. The administration remains committed to enforcing sanctions on Iran while ensuring that allied nations can safely move oil through the region.
While the current workarounds are costly, they have prevented a severe supply shock and kept gasoline prices from reaching crisis levels for American families.
Original reporting: Texarkana Gazette — read the source article.
