Recovering Exports Fail to Reassure Oil Markets

Oil prices have continued to rise despite reports that crude exports from the Middle East are recovering. The apparent contradiction reflects a market in which the volume of oil moving through the region is only one part of the supply equation. Security risks, transportation costs and uncertainty over future shipments remain significant concerns.

According to Kpler estimates cited in the report, total Middle Eastern oil exports in October exceeded levels recorded before the United States and Israel launched strikes on Iran in late February. Average flows through the Strait of Hormuz reached 11.7 million barrels per day, compared with 9.8 million in September. The October figure remained below the pre-war February average of 14.5 million barrels per day.

These figures suggest that exporters have found ways to restore shipments despite the conflict. However, the recovery has taken place alongside continued attacks on commercial vessels, leaving the reliability and cost of these flows uncertain.

Tanker Attacks Complicate Supply Estimates

Maritime security concerns remain a central source of volatility. Data from the UK Maritime Trade Operations and statements from Iran’s Islamic Revolutionary Guard Corps indicated that at least 25 ships were hit in the Strait of Hormuz during the first 20 days of October. Some incidents may go unreported, meaning the actual number could be higher.

Separate figures cited in the report point to substantial fluctuations in tanker movements. Kpler analysts previously estimated that crude flows through the strait fell 27% from a wartime high to at least 10.1 million barrels per day, with only seven commodity carriers crossing on October 6, the lowest daily count since late July.

Reuters also reported at least 18 tanker attacks over a two-week period, based on Kpler data. Another estimate put daily oil flows out of the Persian Gulf at 8.5 million barrels, down from more than 20 million barrels per day two weeks earlier.

These figures cover different reporting periods and measurements, illustrating how rapidly conditions have changed. The conflicting estimates make it difficult for market participants to determine the consistency of supply recovery.

Alternative Shipping Routes Come at a Cost

Exporters have increasingly relied on ship-to-ship transfers to move oil through the region. While these arrangements provide an alternative to more conventional shipping operations, they have contributed to higher freight costs and sustained pressure on tanker availability.

The strain has prompted consideration of additional shipping capacity. Reports cited in the article indicated that President Donald Trump was considering lifting sanctions on some tankers used to transport Russian oil in an effort to ease the shortage of available vessels.

However, expanding the pool of available tankers may be more difficult than simply removing restrictions. Rahul Kapoor, global head of shipping analytics and research at S&P Global Energy, said only a portion of the sanctioned fleet would realistically be able to return to mainstream commercial trading.

The limited availability of suitable vessels means that alternative transport arrangements cannot fully replace normal shipping operations. Higher freight costs and additional logistical complexity can therefore persist even when crude exports recover.

Futures and Physical Markets Send Different Signals

Oil futures have moved higher as traders account for geopolitical uncertainty, while physical-market prices have reportedly declined. The softer physical market has reflected improving flows through Hormuz and a modest reduction in tanker rates.

The divergence suggests that futures prices continue to incorporate the risk of further disruption, whereas physical prices are also responding to the availability of crude for immediate delivery.

Low inventories remain another concern. A senior commodity analyst at Marex told Bloomberg that headline risk remained elevated and that current conditions made it difficult to see oil stocks rebuilding significantly.

Potentially lower heating demand during winter could provide some relief, depending on weather conditions. However, relying on a milder winter would not eliminate the risks associated with shipping disruptions and regional tensions.

What Investors Should Watch Next

The outlook for oil prices will depend on whether export flows remain stable, tanker attacks subside and shipping costs begin to normalize. Progress toward a US-Iran agreement could reduce geopolitical risk, while renewed escalation could put further pressure on supply and transportation.

For now, recovering export volumes have not restored normal market conditions. The ability to move oil safely and economically remains as important as the volume produced, leaving energy prices vulnerable to further disruption through the end of the year.