Six months after the US and Israel launched Operation Epic Fury against Iran on February 28, the Strait of Hormuz has yet to recover even a quarter of the roughly 20 million barrels a day of crude it carried before the war.
The alternative route Gulf producers turned to, the Red Sea, is now under pressure too.
Following the killing of Iran’s supreme leader Ali Khamenei, Tehran began targeting Gulf refineries and gas plants within 48 hours and shut the Strait of Hormuz.
A June 17 deal brokered by Oman and Qatar and signed in Islamabad briefly reopened the waterway. It collapsed within weeks over Iran’s demand for a role in managing the strait and charging tolls on passing vessels. Washington and Gulf states have rejected the terms.
A follow-on 60-day memorandum lapsed on August 17 with talks still deadlocked. Traffic has returned to a trickle, although diplomatic efforts to reopen the waterway are still under way.
The war has also altered the political calculations of the Gulf states. Saudi Arabia, the UAE and Qatar have spent years building trade and energy links that reduce their dependence on any single route. Six months of war have exposed how limited those alternatives remain.
The UAE has left Opec and is expanding exports outside the Gulf, while Saudi Arabia is increasingly relying on pipelines and longer shipping routes. The conflict has also raised new questions in Gulf capitals about the reliability of US security guarantees.
The International Energy Agency has called the oil disruption the biggest on record. At its peak, global supply fell by about 12 million bpd, more than twice the loss during the 1979 Iranian revolution. Unlike previous oil shocks, the war hit several commodities at once, disrupting oil, refined products, gas and fertiliser supplies.
Traffic through Hormuz has fallen from an average of 88 ships a day before the war to around 16 a day six months later, according to Kpler. Brent crude, trading above $70 before the conflict, surged to an intraday peak of $126 a barrel on April 30 before falling back to about $88.
Gulf infrastructure under attack
The first wave of strikes in early March hit some of the Gulf’s biggest refineries, gas plants and export hubs.
In Saudi Arabia, drones struck the 550,000-bpd Ras Tanura refinery, followed by attacks on the Satorp and Samref plants. A strike on a pumping station on the East-West pipeline cut 700,000 bpd of capacity.
Qatar’s Ras Laffan LNG complex, the world’s largest liquefaction facility, was hit by a missile strike that knocked out 17 per cent of its capacity of about 77 million tonnes a year. The damaged capacity is not expected to be restored until 2027.
The UAE’s 1.3 million-bpd Ruwais refinery, along with its Habshan gas plant and Shah gasfield, came under attack. Kuwait’s two main refineries were hit repeatedly, prompting Kuwait Petroleum Corporation to declare force majeure.
Bahrain’s Bapco refinery and Oman’s Duqm and Salalah ports were also struck. In Iraq, attacks on the Rumaila and Majnoon oilfields were followed by a production shutdown after the country ran out of storage space. Erbil’s Lanaz refinery was also closed after a drone fire.
Iran’s energy infrastructure was hit too. An attack on the South Pars gasfield destroyed two refineries and knocked out 12 per cent of the country’s gas capacity, halting exports to Iraq. An April strike then crippled the Lavan Island refinery for months.
Supply shock
Gulf oil exports fell from about 20 million bpd in February to as little as 1.4 million bpd in May, according to Kpler. By August, they had recovered to 3.6 million bpd, but were still 82 per cent below prewar levels.
Saudi Arabia suffered the biggest loss, with shipments through the strait falling 94 per cent from 7.3 million bpd to 466,000 bpd. Aramco responded by diverting more crude through the 7 million-bpd Petroline to Red Sea ports.
Iran’s exports fell 97 per cent to about 70,000 bpd after the US imposed a naval blockade and fresh sanctions on more than 60 Iranian entities in August. Kuwait and Iraq saw declines of 71 per cent and 72 per cent respectively, although Iraq overtook the UAE in August to become the biggest source of crude still passing through the strait.
The UAE was better placed to adapt. Its shipments through the strait fell 68 per cent, but exports from the Gulf of Oman rose by about 1 million bpd as it made greater use of the Abu Dhabi-Fujairah pipeline. It plans to double Fujairah’s export capacity beyond the existing 1.5 million bpd with a new pipeline due in 2027.
Qatar suffered the smallest decline among the Gulf producers, at 63 per cent. China, the main buyer of Iranian crude, cut imports by 48 per cent to about 530,000 bpd, with little recovery during the brief reopening in June.
Iraq has extended an agreement allowing up to 750,000 bpd through the Kirkuk-Ceyhan pipeline. It is pursuing a $1.5 billion route through Syria, Turkey and Jordan that could eventually raise capacity above one million bpd. Kuwait, with no comparable alternative, is discussing routes through Saudi Arabia, the UAE, Oman and Fujairah.
Red Sea problem
For Saudi Arabia, the Red Sea became the main alternative. Before the war, the kingdom moved an average of 633,000 bpd through Bab Al Mandeb strait, according to Kpler. Once Hormuz closed, that jumped more than threefold to 3.1 million bpd in March and stayed between three million and four million bpd through June.
The workaround collapsed in July after the Houthis declared a maritime embargo on Saudi Arabia, the sharpest rupture in relations since an informal ceasefire in 2022. Saudi shipments through the Bab Al Mandeb strait fell to 2.4 million bpd in July and then to just 64,000 bpd in August.
Ship traffic has fallen too, although less sharply than oil shipments. Crossings of all types averaged 37 a day in the two days before the embargo, compared with a seven-day average of 25 by late August.
The Houthis have also stepped up attacks on energy and shipping infrastructure, striking Yemen’s Mokha port and Saudi Aramco’s Jazan refinery, hitting a cargo vessel in the Bab Al Mandeb strait and later firing a ballistic missile at the Saudi tanker Amzan off Yanbu, the kingdom’s main Red Sea export hub.
Aramco has responded by sending some crude around Africa or through Egypt to reach Mediterranean markets, adding time and cost to voyages. The Bab Al Mandeb strait handles about 12 per cent of global trade, so any further escalation could put more energy supplies at risk.
Data visualisation by Fadah Jassem and Isaac Arroyo.
