Oil flows through Strait of Hormuz rise on Saudi pivot as Red Sea traffic plunges

Oil shipments through the Strait of Hormuz reached their peak since the Iran war commenced, as Saudi Arabia intensified its use of the contested waterway following Houthi attacks on its Red Sea route. September saw Saudi crude deliveries through Hormuz skyrocket to 2.58 million barrels per day (bpd), up from approximately one million bpd in August, accounting for 43% of the strait's oil traffic, according to early Kpler data.

In contrast, flows through the Bab Al Mandeb strait plummeted to 2.56 million bpd, down from 5.45 million bpd in August. Prior to the US and Israeli strikes on Iran on February 28, which effectively sealed Hormuz, Riyadh relied on its five million bpd East-West pipeline to transport oil across the kingdom to the Red Sea port of Yanbu, where tankers conveyed the crude to Asian markets via the Bab Al Mandeb.

The surge in Hormuz traffic did not halt the overall decline in regional oil traffic, with combined volumes from all exporters through Hormuz, Bab Al Mandeb, and the Suez Canal dropping to 9.99 million bpd in September from 12.17 million bpd in August, a 61% reduction compared to February levels and near May's wartime low of 9.95 million bpd.

Saudi Arabia contributed roughly 3.7 million bpd to the September total. The Bab Al Mandeb faced growing tension starting July 20, when Yemen's Houthis imposed a naval blockade on Saudi shipments and threatened vessels linked to Saudi, Israeli, and US interests. In August, a missile strike on the Tihamah cargo ship claimed six lives, causing Saudi flows through the Bab Al Mandeb to plummet to 0.45 million bpd.

A drone assault on the East-West pipeline on September 10 halted oil loadings at Yanbu from September 11. Since then, Saudi Arabia has restarted the pipeline and resumed loadings at Yanbu, although rates remain below pre-attack levels. Excluding Saudi Arabia, flows through the strait declined by 29% to 3.44 million bpd in September, as per Kpler.

Kuwaiti shipments more than halved, the UAE's reduced by 43%, while Iraq's fell 23%. Iran shipped only 100,000 bpd under the US naval blockade, compared to 2.5 million bpd in February. Diplomatic endeavors have yet to restore traffic to normal levels. Iranian Foreign Minister Abbas Araghchi proposed reopening Hormuz within seven days if the US lifted its blockade and sanctions during the UN General Assembly; however, US President Donald Trump dismissed the offer on September 26, stating Iran wanted to open the strait due to its deteriorating situation, while hinting at the possibility of continued negotiations.

In summary, Hormuz flows remain less than a third of February's 20.64 million bpd, underscoring the persistent disruption to the Gulf's principal oil export channel. The Kpler figures do not include tankers traversing without activated transponders.