On July 25, the Greek supertanker Kiku docked at the Mesaieed export terminal in Qatar. Four days later, loaded with crude oil, it transited the Strait of Hormuz at 13 knots. On July 31, shortly after 2 p.m., near the coast of Dubai, the Kiku simply vanished from maritime tracking systems. Its AIS transponder was switched off. On the morning of August 1, the signal reappeared — on the other side of the strait, in the Gulf of Oman.

The maneuver is part of the oil industry’s latest tactic to circumvent the Iranian threat: nighttime “dark” transits with military escort from the United States. The goal is to avoid Iranian drone attacks, like the one that struck the Kiku a month earlier without exploding.

With assistance from the US Navy, oil companies from Saudi Arabia, Kuwait, Qatar, and the United Arab Emirates have begun chartering tankers that switch off their transponders, carry crude through the Strait of Hormuz to the Gulf of Oman, offload cargo onto their customers’ waiting vessels, and return to the Persian Gulf. The strategy has shifted the cost of war-risk insurance and the physical danger of Iranian attacks from commercial shipowners to the US government and the producers themselves.

According to the US Department of Energy, oil traffic through the strait has averaged between 8 million and 9 million barrels per day — roughly double what Wall Street analysts and trackers like Kpler, relying on transponder data, would indicate. About 80% of traffic over the past two weeks has been “dark,” transiting along the coast of Oman, as far from Iran as possible.

CNN observed more than a dozen ship-to-ship transfers in the Gulf of Oman over two days, with tankers heading to China, Taiwan, South Korea, the Philippines, Vietnam, and Thailand.

How the bypass works

The Kiku case illustrates the logistics of the operation. After reappearing near Fujairah, the supertanker anchored alongside another Greek vessel, the Nave Electron, which had arrived in the Gulf of Oman a day earlier. The two remained together for a week conducting a ship-to-ship oil transfer. On August 8, the Nave Electron departed loaded, bound for Ningbo, China. The Kiku remained idle off Fujairah until August 14, when it disappeared again — reappearing the following day in the Persian Gulf, en route to Qatar.

Radar and satellite imagery reveal a picture that transponder data does not capture. In satellite photos from August 14, rows of dots appear hugging the coast of Oman through the strait, with no corresponding tracking data from the same time. On August 7, the Greek tankers Nissos Kythnos and Front Otra appeared side by side in the Gulf of Oman; a week later, the Front Otra was detected in the Arabian Sea heading toward Taiwan.

The strategy is not perfect. The strait is only 23 miles wide, and radar can still detect a ship with its transponder off. Two UAE-flagged vessels were attacked in the same week. Additionally, GPS interference caused by the regional conflict complicates assessments.

Mass rerouting

The dark transits with escort are only the most visible face of a broader reorganization. Saudi Arabia has rerouted roughly 5 million barrels per day that would have gone to tankers in the Persian Gulf, sending the oil through the East-West Pipeline to the port of Yanbu on the Red Sea. Other Middle Eastern producers have diverted an additional 2 million barrels per day around the strait.

Global production has also increased to compensate. Brazil, Guyana, and Venezuela added more than 1 million barrels per day of extra output. The United States added hundreds of thousands of barrels per day to the market.

On the demand side, the US released 400 million barrels of emergency oil, drastically drawing down the Strategic Petroleum Reserve — now at its lowest levels since the early 1980s. China has also tapped heavily into its massive stockpiles while sharply reducing crude oil imports. Global demand shrank as prices rose, helping to balance the market.

FactorMarket impactDark transits with US escort8–9 million barrels/day through the straitSaudi rerouting via East-West Pipeline5 million barrels/day diverted from the GulfOther Middle East rerouting2 million barrels/day around the straitExtra output from Brazil, Guyana, VenezuelaOver 1 million barrels/dayUS strategic reserve release400 million barrels

Note: Data compiled from US Department of Energy information and vessel trackers.

The limits of the stopgap

Oil stockpiles have been drawn down by as much as 1.9 billion barrels during the war. If the market reaches equilibrium, those reserves will need to be replenished to avert the next crisis. Otherwise, they will be drained to levels so low they can no longer meet global demand, reaching a tipping point where the only solution will be significantly higher prices.

A similar problem has already emerged in the fuel market. Three of the world’s four major refining hubs are in serious trouble. The war has damaged refineries in the Middle East and slowed fuel exports from the region. Russia, another major supplier, has been pushed out of the market by the conflict with Ukraine, with refineries targeted by drones and exports cut. China, normally a major fuel exporter, is limiting its overseas sales to avoid domestic shortages.

That leaves US Gulf Coast refineries bearing the brunt of global demand. Gasoline, diesel, and jet fuel are seeing demand so elevated and refining capacity so constrained that prices have spiked — far beyond what crude oil prices would suggest.

President Donald Trump managed to keep oil prices suppressed for months by promising an imminent breakthrough in negotiations. The plan has recently shifted: the new US strategy is to strangle Iran with an “overwhelming economic operation” through a prolonged naval blockade of Iranian ports. That has driven prices gradually higher for weeks, approaching $100 per barrel.

With the two countries locked in an intractable standoff, the fight for control of the strait has kept oil — especially gasoline, diesel, and jet fuel — at uncomfortably high prices for consumers, fueling inflation and reducing disposable income. Still, the market’s ability to partially circumvent the conflict has prevented prices from exploding as dramatically as the largest oil supply shock ever recorded might suggest.