Gulf nations keep oil flowing despite Iranian attacks, but workarounds are costly

The ongoing Iran war has forced Gulf nations to find ways to maintain oil flow despite the Strait of Hormuz being closed. The initial shock of a 15 million barrels a day loss to global supplies was largely alleviated by Saudi Arabia and other Gulf producers finding alternative routes. They utilized existing pipeline capacity and established new ones, such as the East-West pipeline from Saudi Arabia to the Red Sea port of Yanbu, then to the Bab el-Mandeb Strait for shipping to Asia.

Similarly, the UAE used its pipeline through Oman to Fujairah to bypass the strait. Ship operators even took risks to sail through U.S.-supervised routes near Oman, keeping exports from collapsing completely. However, Iran has continued attacking oil facilities, and some oil still leaks into the strait. In July, the UAE declared a blockade of Saudi oil shipments, forcing the Saudis to divert shipments via the Suez Canal or an Egyptian pipeline.

The Saudis have been sending oil through the U.S.-guided southern corridor in the Strait of Hormuz, with six supertankers loading 12 million barrels at Persian Gulf terminals recently. U.S. officials have touted the role of this route in maintaining energy flow while increasing pressure on Iran. While some 6-7 million barrels per day are flowing through the southern route, about 7 million barrels are still missing from prewar levels, with 3.5 million barrels being drawn from global inventories.