Reason crude isn’t crossing $200? How Iran, Gulf states are bypassing Hormuz blockade to transport oil

Oil prices have surged since Iran’s closure of the Strait of Hormuz and the subsequent US naval blockade of Iranian ports, yet crude has stopped well short of the $200-a-barrel levels many analysts once feared. According to maritime intelligence firm TankerTrackers, one key reason is the emergence of alternative shipping networks that are allowing oil and cargo to continue flowing despite the disruption.The company reported a sharp rise in covert “dark” ship-to-ship transfers across the Middle East over the weekend. These operations involve vessels switching off tracking systems and transferring cargo at sea, a tactic long associated with Iranian sanctions-evasion networks. However, TankerTrackers said the latest activity involves crude from Arab Gulf producers rather than Iran itself.“This weekend saw a lot of dark ship-to-ship transfers of oil in the Middle East. It’s not Iranian oil. Instead, this is oil coming from Iran’s Arab neighbors,” TankerTrackers wrote on X. The firm added that the transfers were helping to stabilise global supplies and were “yet another reason why oil isn’t $200/barrel right now”.The disruption began in March when Iran closed the Strait of Hormuz following US-Israeli strikes and attacks on its regional allies. Conditions worsened after Washington imposed a naval blockade on Iranian ports in April, forcing traders and regional exporters to seek new routes to market.Alongside the oil transfers, Iran has increasingly relied on indirect trade corridors to keep goods moving. More than 50 days into the blockade, Iraq’s Umm Qasr port has emerged as an important alternative hub. Cargoes from the United Arab Emirates are being shipped to the Iraqi port aboard non-Iranian vessels before continuing into Iran by road or water.‘Ghost shipments’Experts believe millions of barrels of oil are still making their way through the strategic waterway via clandestine routes. These “ghost” shipments involve tankers switching off their tracking transponders and travelling undetected through the blockade. According to investment bank Piper Sandler, around 900,000 barrels per day were moved through such covert journeys in May, while another 2.1 million barrels were transported on vessels believed to have paid tolls to Iranian-linked entities.The hidden flows have helped cushion the impact of the disruption. JPMorgan estimates that clandestine shipments reached about 2.1 million barrels per day during the final weeks of May. “Despite the ongoing naval blockade and the steep decline in commercial traffic, surprising volumes of crude and petroleum products still appear to be transiting the Strait,” said Natasha Kaneva, JPMorgan’s head of global commodities strategy.Even so, some experts warn that the market may be underestimating the long-term impact. Commercial inventories continue to fall, and emergency reserves are being depleted. Piper Sandler expects Brent crude to average $130 a barrel in the coming months, suggesting that the current calm may only be temporary.The alternative networks underline how regional producers and traders have adapted to the crisis. While military tensions remain high, with President Donald Trump this week accusing Iran of shooting down a US Army Apache helicopter near the Strait of Hormuz and warning that Washington “must, of necessity, respond to this attack” and a day later he hinted that Tehran will have to “pay the price.”