Gulf oil exports 100 million barrels above market estimates, traders say

Since Iran's war began and Tehran declared the Strait of Hormuz "closed," the market has priced in a massive supply disruption premium — but actual lost Gulf oil exports are far smaller than initially feared, traders and shippers say.

"The physical market is telling a different story from the futures curve," said Amena Bakr, an analyst at Kpler. "We've tracked some 96 million barrels of non-Iranian crude oil getting out since early May."

That figure, which includes cargoes still loading, likely exceeds 100 million barrels — broadly consistent with U.S. President Donald Trump's claim that a "secret mission" using autonomous vehicles, aircraft and drone escorts helped more than 200 vessels transit the southern part of the strait near Oman's coast. The flow remains below the pre-war 15 million barrels per day that once passed through the waterway, but the gap is narrowing. Kpler data shows China's seaborne crude imports dropped to 6.8 million barrels a day in May, the lowest since October 2016, as the world's top buyer drew down inventories rather than pay war-inflated prices.

The reassessment carries significant implications. Brent crude has held above $90 a barrel since the conflict began, with traders pricing in a worst-case scenario of prolonged supply loss. If actual lost exports prove meaningfully smaller, that premium could unwind rapidly. "Consumer sentiment is already at all-time lows, but if oil prices stay here for another three months, or move meaningfully higher in the short-term, start to look for a real economic impact," said Phil Blancato, chief market strategist at wealth manager Osaic.

The disconnect between market perception and physical reality has widened in recent weeks. While Brent futures have been supported by fears of a prolonged closure, tanker-tracking data from Kpler and TankerTrackers.com shows Gulf Arab states have been moving crude through the strait using ship-to-ship transfers and by turning off tracking systems — methods that obscure the origin of cargoes and allow vessels to slip past Iranian patrols. U.S. forces have supported these operations through what Lloyd's List Intelligence editor-in-chief Richard Meade described as a "limited overwatch operation" using autonomous vehicles and drone escorts. An AH-64 Apache attack helicopter that crashed off Oman this week after being hit by an Iranian drone was likely part of that mission, Meade said.

Supply gap narrows as Iran feels the squeeze

The easing of the strait bottleneck comes as Iran itself faces mounting pressure. The U.S. blockade has cut Iran's oil output by an estimated 800,000 barrels per day, according to energy consultancy Wood Mackenzie, while onshore storage has swelled to 69 million barrels — the highest level since Trump's "maximum pressure" campaign in 2020. President Masoud Pezeshkian acknowledged the strain in a televised address Wednesday, saying "our routes have been blocked" and that the country faces "a difficult test."

For the global market, the key question is whether the increased flow can be sustained. The last time a comparable supply scare hit the market — during the 2019 Abqaiq-Khurais attacks — Saudi Arabia restored production within weeks, and Brent fell 25 percent over the following two months. A similar repricing today would put Brent back toward $70 a barrel, though the ongoing war and Iran's continued threats to shipping cap the downside.

This article is for informational purposes only and does not constitute investment advice.