Crude shipments through the Strait of Hormuz have rebounded to roughly three-quarters of prewar levels as Kuwait and Qatar joined larger Gulf producers in using ship-to-ship transfers to move barrels out of the Persian Gulf without requiring commercial tankers to navigate the contested waterway.
Traders estimate that 7 million to 8 million barrels a day are now exiting the strait, up from about 4 million barrels a day in mid-July, according to a person familiar with the flows who asked not to be identified. Energy cargo analytics firm Vortexa put the figure even higher, saying flows through the waterway recently approached 10 million barrels a day.
The recovery has helped cap the rally in global crude prices. West Texas Intermediate was trading near $81 a barrel Thursday ahead of European trading, while Brent hovered around $86, both well below the peaks reached in late April.
The revival stems from a practice known as shuttle transport. With few commercial owners willing to send vessels through the strait, Gulf producers are relying on their own tanker fleets or paying steep premiums to charter ships that will make the passage. Those vessels then transfer their cargoes to other tankers waiting in safer waters outside the strait.
The United Arab Emirates was the first Gulf exporter to adopt the offshore transfer tactic in the Gulf of Oman, followed by Saudi Arabia after Houthi attacks in the Red Sea forced the kingdom to lean more heavily on the Persian Gulf route.
Kuwait and Qatar began shuttle operations around June. The two mid-sized producers exported a combined 2 million barrels a day before the conflict, and their joint shipments have now recovered to about 70 percent of that level, according to the trader’s calculations.
Kuwait relies mainly on a state-owned fleet of 11 very large crude carriers, according to shipping database Equasis. Satellite tracking data shows most of those vessels have not emitted a positioning signal for more than two months, suggesting they have switched off transponders to navigate covertly.
The strategy carries direct physical risk. Kuwait has reported to the United Nations shipping regulator that one of its supertankers operated by Kuwait Petroleum Corp. was attacked in early August while transiting the chokepoint. The company did not respond to a request for comment.
Even so, Kuwait has expanded exports enough to meet supply commitments to long-term customers in East Asia while also offering additional cargoes on the spot market.
Qatar’s oil exports, by contrast, are handled mostly by commercial tanker operators. TotalEnergies said this week that it is one of the largest carriers of Qatari crude. QatarEnergy has proposed ship-to-ship deliveries for October cargoes in the Gulf of Oman, outside the strait, a structure designed to spare buyers from entering the disputed area. QatarEnergy also did not respond to a request for comment.
Diplomatic efforts run in parallel
The rise in physical flows comes as diplomatic channels remain active. Qatar’s prime minister was expected in Iran on Thursday to relaunch talks aimed at ending a conflict now nearly six months old. Iran and Oman are also working to finalize an agreement on managing the strait, a senior Iranian source said Wednesday, after Iran’s Revolutionary Guards said the two countries had reached a revenue-sharing arrangement for the waterway.
Iranian officials have cautioned that a navigation agreement would not automatically mean a reopening. Tehran has said the strait will remain restricted unless Washington meets conditions under an interim ceasefire reached in June that later fell apart.
Before the U.S.-Israeli war on Iran began on February 28, the strait carried oil and natural gas equal to about one-fifth of global consumption. Ship-tracking data showed flows collapsed to roughly one-quarter of prewar levels after Iran moved to shut the waterway.
“Crude oil edged lower as the prospect of the Strait of Hormuz reopening improved amid ongoing talks,” said Daniel Hynes, senior commodity strategist at ANZ, though he added that “concerns over shortages in the oil market persist.”
Diesel strain deepens
The disruption has hit refined products harder than crude. Middle East refineries have been damaged in the conflict, and Ukrainian strikes on Russian facilities have cut exports from what was once a major global diesel supplier. U.S. distillate stockpiles, which include diesel and heating oil, fell by 2.2 million barrels in the week to August 21 to 103.4 million barrels, the Energy Information Administration reported Wednesday.
Hynes said that is the lowest seasonal distillate inventory level ever recorded. Diesel futures in New York have more than doubled this year, and European buyers have drawn on imports from Mexico for the first time in seven years.
The recovery in crude flows has not eliminated the threat to shipping. U.S. allies have privately warned that the strait is likely still mined, casting doubt on President Donald Trump’s claim that the U.S. Navy has removed and detonated all explosives laid by Iran.
“The oil market continues to be leaning towards more supplies moving through the Strait of Hormuz,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities. “However with no guaranteed timeline in place yet for further openings a lot of traders have been moving to the sidelines.”
Analysts say the standoff over Iran’s nuclear program remains the core obstacle to a broader resolution. “Iran also understands the importance of its geographical position and the leverage that the Strait of Hormuz provides, so the risk of prolonged uncertainty remains,” said Priyanka Sachdeva, head of market insights at Phillip Nova. “As long as the risk to supply remains, some degree of war premium can continue to be priced into oil.”