Iran has requested that all traffic in the Strait of Hormuz be conducted through the northern corridor, which passes through its territorial waters. This request comes as the high volume of oil exports from Saudi Arabia, Iraq, and Kuwait, along with the volume of oil from the UAE that cannot reach Fujairah via pipeline, is moving through the southern corridor. This corridor is still under the aerial and naval support of the United States Central Command (USCENTCOM).
Oil Traffic Analysis
Analyses from Windward Maritime Intelligence and Operations Center (MIOC) indicate that Iran is increasingly unable to restrict traffic in the southern corridor. Despite threats against individual vessels, the high flow of oil continues. From September 16 to 23, Windward recorded 55 visible AIS transits, which is about 94% less than pre-war traffic, which was approximately 910 transits per week. This number includes AIS identifications along with at least one satellite imaging pass per day, meaning the actual number of transits is almost certainly higher.
Use of Supply Vessels
Exports from the Arabian Gulf are now increasingly reliant on a "supply vessel." Vessels with AIS turned off pass through the strait and offload their cargo via ship-to-ship transfer in the Gulf of Oman before returning back into the Gulf. Given that few VLCCs are willing to enter the Gulf, exporters collect the maximum cargo volume per transit and then transfer these loads to Suezmaxes in the Gulf of Oman via ship-to-ship transfer. This action reduces the number of vessels that need to undertake risky transits in the strait.
Between September 20 and 22, satellite identifications from MIOC and Vortexa cargo data indicate that 26.72 million barrels of oil have exited through the strait. Nearly two-thirds of this volume was transferred after ship-to-ship transfer. During these three days, the flow was equivalent to about 8.9 million barrels per day, although caravan days represent peaks rather than a sustainable export rate. In comparison, Vortexa estimates Saudi loadings in the Gulf from September 1 to 27 at 105.6 million barrels, or 3.9 million barrels per day.
Impact of Developments on Saudi Oil Loadings
Saudi vessels are still loading oil at Ras Tanura and Juaymah. However, most of them are doing so with AIS turned off. Between January 10 and 16, 35 oil tankers visited these two ports with AIS on, while this number dropped to only 2 vessels between September 10 and 16. Vortexa cargo data shows that loadings in these two time frames decreased from 52 to 16 per week. This decrease indicates that a significant portion of the reduction in vessel traffic is due to turning off AIS rather than a halt in oil movement.
The last visible increase occurred between July 1 and 10, when the memorandum of understanding expired. During this period, eight oil tankers moved from Ras Tanura and Juaymah to China, South Korea, Duqm, and Fujairah. Seven of them were VLCCs, six of which were operated by Bahri, the national shipping company of Saudi Arabia. After July 10, oil tankers that were still transmitting AIS were mainly smaller vessels moving between Saudi ports, with one VLCC visiting Juaymah on August 15 and 16. Across all Saudi Gulf ports, visible contacts of oil tankers dropped from 17 in July to 5 in August and 4 in September.
Vortexa cargo data indicates that loadings have continued. Oil loadings at Saudi Gulf ports increased from 8 in June to 19 in August and 55 in September. Of these 55 loadings, 50 were VLCCs, including 21 under Bahri's supervision and 14 under the supervision of Sinokor, a South Korean shipping group. Almost all of them loaded with AIS turned off. It is estimated that Saudi oil is moving through the Strait of Hormuz on vessels with dark AIS.
Challenges to Saudi Oil Exports
With the reduction of east-to-west pipeline flow following the attack on Petroline, Saudi oil exports to the Red Sea have decreased, and Saudi Arabia has redirected its exports back to its Gulf ports. Vortexa estimates Saudi Gulf loadings from September 1 to 27 at 3,911 thousand barrels per day, which is more than four times the 933 thousand barrels per day in August and 39% less than the 6,385 thousand barrels per day before the war in January. However, Gulf loadings remain significantly below pre-war levels. Gulf oil exports have improved significantly since August, but the availability of VLCCs remains limited. With the east-to-west pipeline improving, Saudi Arabia is likely to transfer more exports to Yanbu while tensions in the Strait of Hormuz continue.
Ultimately, this oil flow, which is still under threat, continues but is increasingly exposed to further escalation.
Read more: OPEC+ Action to Maintain Oil Quotas in November · Unexpected Increase in U.S. Goods Trade Deficit to $132.6 Billion
