Middle East Producers Bypass Strait of Hormuz at Steep Cost as Oil Flows Drop to 6.5M Barrels Daily

Oil flows through the Strait of Hormuz have averaged approximately 6.5 million barrels per day since early September 2026, down sharply from roughly 20 million bpd before U.S. and Israeli strikes on Iran began in late February, according to Kpler data cited by Reuters. Saudi Arabia restarted its East-West pipeline this week after Houthi drone strikes forced a shutdown earlier this month, briefly pushing oil prices lower. The pipeline had been rerouting about 4 million bpd to the Red Sea port of Yanbu before the attacks. Aramco has not loaded crude from Yanbu since September 16, 2026. Gulf producers are increasingly relying on ship-to-ship transfers in the Gulf of Oman and discounted crude sales. Freight costs on the Middle East-to-China route have surged to $30 per barrel—an all-time high—and now represent up to 25% of total shipping costs. The UAE is on track to export 3.6 million bpd this month, up from 3.4 million bpd last year.