Tankers defy sharp escalation of Iranian attacks to keep crude oil flowing through Strait of Hormuz

Tankers have continued carrying crude because the shipping industry changed how it operates rather than abandoning the strait. Higher freight rates and oil prices also created stronger financial incentives to keep voyages moving. U.S. military air support has been essential to that effort.

One major adaptation is a shuttle system. Tankers load at Persian Gulf ports, turn off their transponders while crossing Hormuz, and transfer their cargo to waiting tankers in the Gulf of Oman. Those vessels then carry the oil to Asian refiners. The arrangement lowers insurance exposure for ships waiting outside the strait.

The system is costly and inefficient. About 20% of the world's supertanker fleet is involved, and tanker rates rose above $900,000 per day in early October. Even with attacks doubling to 30 vessels in October flows averaged nearly 11.1 million barrels per day, though weekly volumes later fell sharply.

The Strait of Hormuz is a narrow maritime passage between the Persian Gulf and the Gulf of Oman. It is the exit route for tankers loading crude at Persian Gulf ports. Because the route is narrow, disruptions there can affect many shipments at once.

The article identifies Hormuz as one of the world's main sources of crude oil. Tankers cross it before transferring cargo or continuing toward refiners, especially in Asia. In the shuttle system, ships cross with transponders turned off and hand their cargo to tankers waiting in the Gulf of Oman.

Its importance is visible in the numbers. Crude exports fell nearly 90%, from 16 million barrels per day in February to 1.8 million in March after attacks began. Flows later recovered, reaching nearly 11.1 million barrels per day in October, despite a sharp rise in attacks.

Before the war, crude exports through Hormuz stood at about 16 million barrels per day in February. That provides the article's prewar comparison for measuring the disruption. March showed the initial impact of Iran's attacks, when exports plunged nearly 90% to 1.8 million barrels per day.

Flows later recovered as tankers received U.S. military protection and companies adapted their operations. In October, average crude exports through Hormuz reached nearly 11.1 million barrels per day. That was only about 2% below September's average, even though violence sharply increased.

The recovery was not steady. Daily flows were highly volatile, and the week ending Wednesday near the end of October saw volumes fall to 7.3 million barrels per day. That level was more than 40% below the prewar baseline, showing that the route remained vulnerable despite the broader rebound.

Dangerous voyages have raised costs across the oil supply chain. Brent crude prices climbed more than 13% in October and traded above $117 per barrel. Higher oil prices reflect concern about shipments, while higher freight rates reflect the extra risk, protection and equipment needed to move them.

Supertanker hire rates show the scale of the change. A voyage from the Gulf of Oman to Asia cost $249,000 per day in early September. By the first week of October, the rate exceeded $900,000 per day. Transportation costs rose to about $21 per barrel, compared with $6.50 in September.

For Asian refiners, freight became a much larger part of the delivered crude cost. It reached roughly 20% to 30% of that cost, according to the article. Those expenses reduce refinery margins, even though Gulf producers are covering more shipping costs to protect their market share.

The shuttle system divides one oil journey between different tankers. Ships load crude at Persian Gulf ports, cross Hormuz with their transponders turned off, and transfer the cargo to tankers waiting in the Gulf of Oman. Those second vessels deliver the oil to Asian refiners.

This arrangement reduces some risks because ships waiting outside the strait do not need to enter the most dangerous area. Melton said it also lowers insurance costs for those vessels. The system therefore helps exporters maintain crude flows even as attacks intensify.

But the workaround is inefficient and expensive. It requires additional tankers, equipment and experienced crews, and about 20% of the world's supertanker fleet is tied up in the process. Rates rose from $249,000 per day in early September to more than $900,000 in early October. Freight costs reached about $21 per barrel.

Iran is the attacker in this crisis, targeting commercial ships to cut off a major crude-export route. Its campaign initially caused exports to collapse. In recent weeks, attacks intensified, with at least 30 vessels hit in October and at least 16 seafarers injured.

Gulf oil producers and shipowners are helping keep oil moving. Producers are increasingly covering shipping costs and risks to defend their market share in Asia. They are also using their own tankers. Shipowners and operators use shuttle transfers, transponders turned off during crossings, and other wartime procedures. Higher freight rates make these dangerous voyages more attractive to risk-taking operators.

The U.S. military supplies the crucial security layer. Fighter jets, helicopters and drones provide air cover for tankers transiting Hormuz. Larsen said few shipowners would likely accept the risk without it. The system remains expensive and dependent on continued military protection.

A narrow maritime chokepoint concentrates transport risk. Oil can be produced in many places, but tankers may still need one passage to move large volumes from Gulf ports to buyers. If ships are attacked or insurers and operators demand more protection, the cost and uncertainty affect the global market.

Hormuz shows how this works. Iranian attacks cut crude exports from 16 million barrels per day in February to 1.8 million in March. Tankers later adapted, but Brent crude still rose more than 13% in October as security conditions worsened. Prices respond to threatened supply, not only to barrels actually lost.

The route's resilience limits the physical disruption but does not remove the risk. October exports averaged nearly 11.1 million barrels per day, yet freight costs reached about $21 per barrel. Continued dependence on U.S. protection and an expensive shuttle system could keep prices and refinery costs under pressure.