Iran’s Leverage Over the Strait of Hormuz Is Fading

Gulf crude and condensate exports excluding Iran have recovered to near prewar levels, but the way that oil is reaching global markets has changed dramatically.

At least 16.5 million barrels per day of crude and condensate left the Gulf region between September 1 and 28, matching the region’s prewar average excluding Iran, according to Kpler data. However, only around 60% of those exports physically crossed the Strait of Hormuz, compared with about 83% before the war.

The shift suggests that Iran’s ability to use the strategic waterway as a source of pressure has weakened, although the Strait of Hormuz remains a major vulnerability for global energy markets.

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Gulf Oil Exports Have Recovered to Near Prewar Levels

Kpler data shows that non-Iranian crude exports from the Gulf have recovered significantly after plunging when the conflict disrupted shipping through Hormuz.

The region’s September exports reached at least 16.5 million barrels per day, broadly matching the prewar average. Reuters separately reported that crude exports from key Middle Eastern producers reached 16.328 million barrels per day in September, their highest level since the conflict began.

The recovery has been supported by increased exports from major Gulf producers, including Saudi Arabia and the United Arab Emirates.

But the headline number hides an important change: Gulf producers are no longer relying on the Strait of Hormuz to the same extent as they did before the war.

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Only Around 60% of Gulf Crude Now Crosses Hormuz

Before the war, roughly 83% of the region’s crude exports crossed the Strait of Hormuz.

In September, that share had fallen to about 60%, or approximately 9.9 million barrels per day.

Kpler estimates that the remaining exports were distributed through alternative routes:

Export route	Share of September crude exports
Strait of Hormuz	~60%
Gulf of Oman / outside the Strait	~23%
Red Sea	~17%

This represents a major structural change in the Gulf’s oil-trading system. Kpler says the region’s crude is now effectively leaving through three different exits instead of depending almost entirely on Hormuz.

Saudi and UAE pipelines, Red Sea routes and offshore loading operations have therefore become increasingly important to maintaining exports.

Ship-to-Ship Transfers Are Reshaping Gulf Oil Exports

One of the most significant changes has occurred in tanker operations.

Instead of relying exclusively on conventional long-distance voyages through the Strait, some crude is being transported by smaller or shuttle tankers before being transferred offshore to larger vessels.

This reduces the amount of time larger tankers need to spend in areas considered particularly risky.

Kpler reported that more than 70% of the crude crossing Hormuz in August changed tankers offshore in the Gulf of Oman. That figure refers to August, the latest month for which Kpler provided that specific statistic, and should not automatically be applied to September.

The result is an export system that can keep significant volumes moving, but at a much higher level of complexity and risk than before the conflict.

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Why the Strait of Hormuz Is Still a Major Vulnerability

The recovery in exports does not mean that shipping through Hormuz has returned to normal.

Some commercial vessels continue to face elevated security risks, higher insurance costs and operational complications. Military protection has also become an important part of keeping shipping lanes open.

That means Iran’s leverage has weakened, but it has not disappeared.

Tehran never formally controlled the Strait of Hormuz. Its influence instead comes from its ability to make passage through the waterway dangerous and costly, forcing shipping companies and energy producers to consider alternative routes and security arrangements.

The Role of U.S. Naval Protection

U.S. military support has helped commercial shipping continue through the strategic waterway despite the security risks.

For traders, this distinction is important. A waterway can remain operational while still carrying a significant geopolitical risk premium.

If commercial shipping depends on military escorts, unusual tanker arrangements and higher insurance costs, the market may continue to price in the possibility of another disruption.

That is one reason increased crude flows have not translated into a complete normalization of energy prices.

Why Oil Prices Have Not Fallen as Much as Export Flows Have Recovered

The recovery in crude exports has eased some concerns about an outright global crude shortage. However, the energy market is facing a separate problem: refined petroleum products remain under pressure.

Diesel has been particularly affected.

The average diesel price at EU fuel stations reached a record €2.24 per litre on October 1, according to European Commission data, while 12 EU countries recorded new all-time highs.

This shows why stronger crude exports do not necessarily mean cheaper fuel.

Crude must still be transported, refined and distributed. Disruptions to refining capacity and refined-product logistics can therefore keep diesel prices elevated even when crude flows improve.

The Remaining War Premium

The changing export routes have reduced some of the immediate pressure on global crude supply, but they have not eliminated geopolitical risk.

The continued possibility of attacks on vessels or infrastructure, higher shipping costs and reliance on military protection can all contribute to a war premium in energy prices.

For oil traders, this means that headline export volumes should not be viewed in isolation.

A recovery in physical supply can be bearish for crude prices, but renewed attacks, disruptions to shipping or damage to infrastructure could quickly reverse that effect.

Why Iran Has Not Completely Lost Its Leverage

The latest data points to a gradual erosion of Iran’s leverage rather than its complete disappearance.

The Gulf oil market has demonstrated that producers can adapt. Pipelines, Red Sea routes, offshore loading and ship-to-ship transfers have allowed substantial volumes of crude to reach international markets without relying entirely on Hormuz.

But those alternatives remain more complicated and costly than the prewar system.

As long as vessels require additional security measures and producers depend on unconventional routes to keep oil moving, the Strait of Hormuz remains an important vulnerability.

What the Changing Oil Routes Mean for Global Energy Markets

The biggest development is not simply that Gulf exports have recovered. It is that the global oil market has shown greater logistical flexibility than it had before the conflict.

For crude markets, this can reduce the immediate impact of a partial disruption in Hormuz.

For refined products, the picture is less comfortable. Diesel markets remain much tighter, with European prices at record levels despite the recovery in crude exports.

This divergence between crude and refined products is important for financial markets because it can influence inflation expectations, transportation costs and monetary-policy expectations.

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Is Iran’s Leverage Over Hormuz Really Disappearing?

The latest evidence suggests that Iran’s leverage over the Strait of Hormuz has weakened, but it has not disappeared.

Gulf producers have managed to restore crude exports to near prewar levels by using alternative routes and new shipping arrangements. Around 40% of September exports bypassed the Strait, compared with only about 17% before the war.

However, the cost and complexity of those alternatives demonstrate that Hormuz remains strategically important.

The key question for energy markets is therefore no longer simply whether oil can leave the Gulf. It is whether those flows can continue without another major security disruption.

Market Impact

For traders, the recovery in Gulf crude exports is potentially bearish for oil prices because it reduces immediate supply concerns. However, elevated shipping risks, military protection and tight refined-product markets continue to support a geopolitical premium.

A renewed disruption around Hormuz could quickly push crude and fuel prices higher, while continued normalization of exports could gradually reduce that premium. The current divergence between recovering crude flows and record diesel prices remains particularly important for inflation and broader financial-market expectations.