Has Iran Lost the Hormuz Card? .. Gulf Tankers Innovate a New Way to Keep Oil Flowing

Listen to the article, the audio text is automatically generated by a machine system.

Recent developments in oil shipping in the Gulf have shown a significant decline in Iran's ability to effectively influence oil flows through the Strait of Hormuz, after national oil companies in Saudi Arabia, the UAE, and Kuwait succeeded in developing a new operational model for transporting crude that has allowed exports to continue at levels close to their normal rates.

Energy and maritime shipping market analyst Alexander Stahl believes that oil exports in the Middle East have returned to about 94% of their usual levels, despite the security tensions in the region and attempts to disrupt navigation in the strait, reflecting the Gulf producers' ability to adapt to increasing risks.

According to Stahl, "ADNOC" began early on to build an operational model to overcome the risks associated with the strait, by allocating a fleet of supertankers to transport crude from within the Gulf to the Gulf of Oman, where shipments are transferred between ships before the tankers are returned to the Gulf to repeat the task.

Stahl describes this mechanism as the "Hormuz Shuttle," which has been developed since last May. Both "Aramco" and Kuwait have adopted this model.

As operations expand, the number of tankers operating under this model has risen to more than 100 tankers, most of which use a route close to the Omani coasts instead of passing through the corridors closer to the Iranian coasts.

Despite the success of the model, its cost is extremely high compared to normal shipping conditions.

Stahl estimates the cost of transporting oil from the Gulf via this system at about $28 to $30 per barrel, which means that a supertanker carrying two million barrels could generate revenues exceeding $50 million during a journey lasting between 10 and 15 days.

These exceptional revenues explain the significant increase in the value of supertankers currently in the market compared to the cost of building new tankers, as players prefer to take advantage of immediate demand rather than waiting for the delivery of new ships after years.

Analysis indicates that Saudi Arabia has redirected a large portion of its exports towards Red Sea ports to reduce reliance on the Arabian Gulf. However, changing conditions in the Bab el-Mandeb area have complicated this route.

This has prompted "Aramco" to gradually return to relying on the Ras Tanura port and Gulf exports, benefiting from its ownership of a large fleet of tankers belonging to "Bahri", which has alleviated insurance burdens and risk costs compared to competitors.

According to Stahl, "Bahri" deployed more than 20 tankers in the region during September, allowing for an increase in Saudi participation in the "Shuttle Hormuz" operations and enhancing its ability to maintain export levels.

The success of the Gulf model was not solely dependent on oil companies, as Stahl believes that the U.S. military played a pivotal role in facilitating the passage of tankers through the strait.

Ships wishing to cross coordinate with centers affiliated with the U.S. military to determine crossing routes and suitable timings, while U.S. maritime and aerial assets focus on securing the southern corridor near the Omani coasts.

This approach, according to the analysis, has allowed for the securing of transit movements without the need for direct escort of each tanker individually, which has increased operational efficiency and reduced operational risks.

In contrast, Stahl sees that one of the most prominent recent transformations is the increasing difficulties Iran faces in exporting its oil.

He attributes this to the limited number of tankers willing to operate in Iranian ports amid rising risks and sanctions, which has led to a decline in loading activity at some major ports, according to his assessment.

He believes that the paradox has become clear: while Gulf countries have succeeded in innovating mechanisms to maintain the flow of oil, Iran itself is facing greater challenges in marketing its production.

As for the markets, the most important message is that the Gulf countries' ability to adapt to geopolitical risks seems greater than it was before, which may limit the impact of any future threats on global energy supplies and reduce fears of a complete halt in exports.