4 Million Barrels Daily! The Energy Lifeline Amidst War: Middle Eastern Oil Producers Stabilize Global Oil Prices via "Dark Fleet" Operations

The Iran war has continued for months, yet Middle Eastern oil producers have utilized a covert "dark fleet" transshipment system to continuously supply large volumes of crude oil to global markets. This has become one of the key factors preventing international oil prices from skyrocketing as initially feared by the market.

According to a Bloomberg report on Monday, insiders revealed that despite frequent attacks on vessels, transportation activities involving the secret shipment of crude oil through the Strait of Hormuz and cargo transfers in the Gulf of Oman are ongoing.

Insiders stated that actual transportation volumes have exceeded the widely estimated 4 million barrels per day. US Energy Secretary Chris Wright stated last week that approximately 9 million barrels of crude oil were transported through the Strait of Hormuz daily over the past seven days, a figure that surprised many traders.

These covert transportation activities, combined with pipeline alternatives, strategic stockpile releases, and declining global demand, have collectively stabilized August Brent crude oil futures in the $80 to $90 per barrel range. This is far below the $150 per barrel predicted by some analysts at the onset of the conflict. Consequently, market concerns about energy prices driving inflation have eased.

Transportation Volume Exceeds Market Expectations

Before the outbreak of the Iran war, approximately 20 million barrels of crude oil were transported daily through the Strait of Hormuz, accounting for about one-fifth of global oil supply. Following the outbreak of conflict, transportation volume through this channel shrunk significantly, but actual flow remains higher than general market expectations.

The daily figure of 9 million barrels disclosed by Chris Wright is at the high end of various estimates, approaching half of the pre-conflict transportation volume. Insiders further pointed out that actual transportation volumes exceed the widely estimated 4 million barrels per day, but because vessels involved in "dark fleet" operations deliberately hide their whereabouts, traders and analysts find it difficult to accurately quantify the scale.

According to ship tracking data compiled by Bloomberg, as well as data from Kpler and Vortexa, crude oil from Iraq, Qatar, and Kuwait, in addition to the UAE, is also being exported through the Strait of Hormuz in a similar manner.

"Shuttle Transport" Gains Momentum in the Gulf of Oman

The core node of this transportation system is the waters at the entrance to the Strait of Hormuz off the coast of Oman. According to satellite data from the EU's Sentinel-1, approximately 150 vessels, including Very Large Crude Carriers (VLCCs) and bulk carriers, are currently anchored in local waters, compared to only about 40 in January of this year. Since the outbreak of the Iran conflict, the number of vessels anchored in the waters near Sohar in the Gulf of Oman has also surged.

Most of these vessels are waiting to receive cargo from transport ships that have switched off their transponders to cross the Strait of Hormuz, before transshipping to larger tankers for delivery to global markets. This "shuttle trade" model has persisted for months, forming a core component of the wartime energy supply chain.

Abu Dhabi National Oil Company (ADNOC), the state-owned oil giant of the UAE, stated: "Despite repeated attacks on our vessels, we remain determined to continue fulfilling our responsibilities, supplying energy to global markets safely, and making every effort to meet customer needs and commitments." The company has sold approximately 135 million barrels of crude oil to global buyers and launched a new round of sales last week.

High Costs and Persistent Risks in Transportation Activities

Insiders emphasized that the current situation is far from normal for Middle Eastern oil producers. Sources familiar with transportation in the Strait of Hormuz stated that actual maritime incidents far exceed publicly disclosed numbers, including both attacks on merchant vessels and defensive actions taken by Western militaries against harassers to protect transiting cargo ships.

ADNOC also admitted: "Like other energy companies in the region, we continue to bear the direct consequences of unprovoked attacks on our employees, vessels, and facilities. These attacks not only increase risks for employees, contractors, and seafarers but also disrupt critical energy flows."

Several seafarers have lost their lives while passing through the Strait of Hormuz, and oil spill incidents in the region are increasing. Satellite images released last week showed an oil slick in the Gulf of Oman, though its source could not be determined, highlighting the high level of secrecy surrounding these covert transportation activities. Sources familiar with UAE crude oil transportation stated that even after the UAE recently reported another attack on its vessels by Iran, there were hardly any signs of slowed transportation activity.

Traders and analysts pointed out that the continuation of wartime crude oil transportation is one of the important reasons why Brent crude oil futures remained mostly in the $80 to $90 per barrel range in August. Compared to the most pessimistic expectations at the beginning of the war, when some predicted that oil prices could rise to $150 per barrel if the conflict dragged on throughout the summer, the actual trend is currently far below that level.

In addition to "dark fleet" transportation, pipeline alternatives bypassing conflict zones, the release of national strategic stockpiles, and declining global demand have jointly formed multiple buffers suppressing oil prices. The combined effect of these factors has largely limited the impact of the war on the global economy and alleviated market concerns about energy prices driving inflation.