Oil near $100 seven months into Iran war as Gulf exporters find new routes around Hormuz

Oil holds near $100 as Gulf producers work around the Strait of Hormuz shutdown

Rystad expects oil at $85-$90 in the last quarter of the year and $80-$82 next year if Hormuz reopens

Frankfurt, Sep 24: When Iran shut the Strait of Hormuz at the start of the war, cutting off about 15 million barrels of oil a day, many feared a price spike that would crush the global economy. Nearly seven months on, oil costs about $100 a barrel, which is high but well short of the feared levels. Analysts say supply is broadly enough to meet current demand.

Saudi Arabia and the UAE turned to spare pipeline capacity. The Saudis sent oil across the country to the Red Sea port of Yanbu, while the UAE used a pipeline through Oman to Fujairah. From May, some ships also began using a US-supervised route near Oman, sailing at night with tracking systems switched off and handing cargo to tankers waiting outside the strait.

Iran and its allies kept hitting the alternatives. In July, Iranian-backed Houthi rebels declared a blockade of Saudi oil shipments from the Red Sea, so the Saudis rerouted cargoes through the Mediterranean and around Africa. Earlier this month, an attack shut the East-West pipeline, possibly for weeks. Loading at Yanbu stopped on Sept. 11, and the Saudis moved to the US-guided route through Hormuz. Analysts estimate that route now carries 6 million barrels a day or more, about 40% of prewar flows.

Choudhary describes the market as very tightly balanced. Rystad expects oil at $85-$90 in the last quarter of the year, and $80-$82 next year if Hormuz reopens.

The workarounds are expensive. Routing via the Suez Canal can add up to a month to a voyage, and ship-to-ship transfers cost tankers at least a day and a half of waiting. Spot charter rates for Hormuz transits hit $1 million a day on Sept. 11, according to Windward, which works out to about $26 a barrel, against a usual shipping share of 1% to 3% of the cost.

Stock drawdowns, especially by China, cannot last forever. Analysts say Iran could still try to disrupt the US route or the transfer zone near the Omani coast, which would force transfers farther out and push costs higher.

I can also turn this into a version with a headline, strap line, meta title, description and keywords, as in your earlier articles.