Strait of Hormuz News: Crude Returns to Prewar Levels, Will Oil Prices Finally Fall?

Crude oil shipments through the Strait of Hormuz have returned to prewar levels, but fuel supplies remain constrained Engin Akyurt/Pexels Crude oil shipments through the Strait of Hormuz have returned to around prewar levels, raising hopes that one of the biggest pressures on global oil prices could finally begin to ease. But while more crude is reaching the market, analysts warn that the recovery has not extended to refined fuels, leaving diesel supplies squeezed and keeping significant upward pressure on energy costs.

Crude transiting Hormuz reached a seven-day average of 13.5 million barrels per day (bpd) as of Monday, matching the prewar baseline, according to tanker-tracking firm Kpler.

The rebound comes despite continuing tensions around the strategic waterway, which was severely disrupted after the US-Iran war began in February.

Middle East producers have rebuilt their export network using military-protected tanker movements, ship-to-ship transfers and pipelines that bypass the Strait of Hormuz.

Across the wider Middle East Gulf region, crude exports excluding Iran reached at least 16.5 million bpd in September, matching their prewar average, according to Kpler. Around 40% of the region’s crude now leaves without crossing Hormuz, compared with 17% before the war.

In August, more than 70% of crude that did cross Hormuz changed tankers off Fujairah or Sohar in the Gulf of Oman. Shuttle tankers move the oil through the strait before transferring cargo to vessels travelling onwards to buyers.

The system has helped restore supplies, but it remains more complicated and costly than the prewar export network.

Improved oil shipments may reduce the risk of an immediate supply shortage and could push crude prices lower, but a sharp decline is not guaranteed.

Brent has recently traded around the high-$90s to just above $100 (around £75) per barrel, while attacks on energy infrastructure, uncertainty over US–Iran diplomacy, and severe tanker and ship-to-ship-transfer constraints continue to support prices. Reuters has also reported that Saudi Aramco was considering discounts for some Asian buyers to offset elevated freight costs.

The bigger problem for consumers is that the crude recovery has not been matched by refined products such as diesel and other fuels.

Refined product shipments through Hormuz averaged just 677,000 bpd over seven days, compared with 3.6 million bpd before the war, according to Kpler data.

Middle Eastern refinery runs have also remained below normal levels. Kpler estimated runs at around 7.3 million bpd in August, down from 9.9 million bpd in February, citing refinery damage and difficulties exporting finished products. A full return to prewar throughput was not expected before the second quarter of 2027.

That means falling crude prices would not necessarily translate immediately into cheaper diesel or other fuels.

The new export system has proved resilient, but its dependence on alternative pipelines, tanker transfers and protected shipping routes leaves it vulnerable to further disruption.

Saudi Arabia’s East-West Pipeline, which allows crude to bypass Hormuz, was hit in September, temporarily disrupting exports through the Red Sea port of Yanbu. Saudi shipments were subsequently redirected towards Hormuz before Yanbu loadings resumed.

Iranian crude shipments through Hormuz, meanwhile, remain near zero under the US maritime blockade, leaving another major source of supply largely absent from the market.

For oil prices, the return of crude flows removes one major source of supply pressure. However, constrained fuel production, elevated shipping costs and the continuing risk of renewed disruption mean the Strait of Hormuz recovery has yet to restore the broader energy market to its prewar state.