Off the coast of Oman, over the weekend, 16 oil tankers grouped together to transfer millions of barrels of oil that had been stranded in the Persian Gulf. A month ago, that area was completely empty.
They are part of a growing number of tankers that are turning off their transponders (identification and tracking equipment) to increase the flow of oil through the Strait of Hormuz, turning it from a mere trickle into a more consistent stream.
While conventional vessel tracking data shows little change in shipments, senior maritime executives, Asian oil buyers and satellite images reveal a different reality: Hormuz is much less blocked, with steadier crossings and higher volumes.
The increase in the number of ships from Gulf producers that “disappear” from tracking systems to cross undetected by Iran is at the heart of this increase in flows. This coincides with a period in which the United States has been helping vessels navigate the waterway.
Recent volumes reinforce signs that the oil market is managing to direct sufficient supply to buyers and avoid a spike in prices, even with the war involving Iran causing the biggest supply interruption in the history of the oil market. On Wednesday, President Donald Trump claimed that “millions of barrels” had been removed from the region.
Middle Eastern producers have been using ships under their control to transport oil out of Hormuz, avoiding the astronomical fees charged by the small number of shipowners willing to traverse the area. After leaving the strait, the oil is transferred to other tankers, which take the cargo to buyers in Asia and other regions.
“We are seeing an increase in this trend,” said Larry Johnson, head of freight at commodities trader Mercuria Energy Group. “It is mainly, or exclusively, state vessels that are getting through,” he said, adding that these ships “appear to have communication channels and means to ensure safe passage in some way.”
At least some of the vessels that crossed the region did so in darkness, with their onboard lights turned off, according to people with knowledge of the crossings. Crews were also instructed not to use the radio, one of the sources said.
Increase in the volume of oil transported
Currently, about 2 million barrels per day of oil and oil products are leaving the Gulf, according to Rapidan Energy Group. This volume is well below normal, but is significantly higher than that observed at the beginning of the conflict. These flows, combined with the drop in Chinese purchases, the increase in exports from the United States and alternatives such as pipelines that cross hundreds of kilometers through the Middle East, helped to reduce oil prices by almost 30% compared to the peak recorded at the height of the war.
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The transfers carried out over the weekend off the coast of Oman were identified by satellite images from the European Union’s Copernicus system. TankerTrackers.com Inc., which monitors vessels using satellite imagery, said it identified 12 ships carrying oil from non-Iran Middle Eastern Arab countries making transfers outside Hormuz on June 6 alone.
“This is oil coming from Iran’s Arab neighbors,” TankerTrackers.com said. “Yet another reason why oil isn’t $200 a barrel right now.”
On Tuesday, US Energy Secretary Chris Wright said at a conference that oil tanker traffic is “increasing very significantly.” On Wednesday, Trump also commented on the flows leaving the region, adding that they have helped to contain prices.
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“We pulled out, the other night, 22 ships — late at night, without lights, because they don’t have radar,” he told reporters during a bill-signing ceremony in the Oval Office. “We’ve been taking out millions of barrels of oil. Every night, we’ve been taking out oil.”
With the prospect of greater supply, the Middle East’s main oil benchmark has been gradually falling towards pre-war levels. Before the effective blockade of Hormuz, the strait was responsible for the passage of around a fifth of the world’s entire oil supply, in a global market exceeding 100 million barrels per day.
On Wednesday, Trump vowed to attack Iran again and criticized the country for delaying negotiations on an interim peace deal after new attacks overnight increased pressure on a fragile two-month truce. Trump said the retaliation occurred after Iran shot down a US Apache helicopter near Hormuz.
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Other signs
There are other signs that more oil is making its way out of the region. In recent days, both Kuwait and the United Arab Emirates have offered oil for sale outside Hormuz, indicating that barrels have made it through the choke point. Satellite images show a steady stream of ships loading oil at Emirati terminals in recent weeks.
Asian buyers are generally receiving more offers for oil that has managed to leave the region and expect new shipments in the coming days and weeks, according to market operators who requested anonymity.
At least two supertankers, each capable of carrying 2 million barrels of crude oil, crossed Hormuz late last month and began transmitting signals off the coast of Kuwait.
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Both are managed by Kuwait Oil Tanker Co., according to maritime database Equasis, and neither has returned to transmitting signals since. A shipowner who requested anonymity said he had also been hired to transport oil transferred from Kuwaiti ships that crossed Hormuz. Other sources said they believed Kuwait secured the crossing of more than two large oil tankers.
State-owned Kuwait Petroleum Corp. declined to comment.
The increase in flows from Kuwait follows a similar pattern to that seen for UAE oil. Abu Dhabi National Oil Co. sold at least 14 million barrels of oil in a tender concluded late last week, Bloomberg reported on Monday. Loading of these cargoes should begin later this month.
ADNOC is among the companies that transported oil through Hormuz with transponders turned off to avoid detection, Bloomberg reported last month. According to two people familiar with its operations, the company has continued shipping oil through the strait at a healthy pace in recent weeks. The sources requested anonymity because the information is private.
Satellite images also indicate that ships continued to load oil at some of the country’s main terminals. An oil tanker was observed loading off Zirku Island on six of the eight days for which images were available in May, according to Copernicus data. Before the war, this terminal had the capacity to load more than 1 million barrels per day of crude oil and condensate, according to market intelligence firm Kpler.
ADNOC did not immediately respond to a request for comment.
Before some of the most recent crossings, about a quarter of large non-Iranian oil tankers trapped inside the Persian Gulf had managed to escape, shipping data at the end of May showed. Around 90 vessels still remain stranded, compared with around 160 at the beginning of April, according to Georgios Sakellariou, a freight analyst at fleet management firm Signal Maritime.
“The flow of untracked crossings has increased,” he said. “This is visible in the reduction in the volume of oil trapped within the Gulf, although it is still not enough to return to pre-war levels.”
