Saudi Aramco reroutes 4M barrels daily as US-Iran tension strains Gulf energy supply chain

Saudi Aramco’s emergency crude transfers off Oman’s Sohar port, running at roughly 4 million barrels per day through Gulf terminals, offer the clearest measure of how deeply the US-Iran conflict has disrupted regional energy markets. Brent crude had eased to around $104.60 a barrel by Thursday, a modest relief, but the underlying supply chain stress remains firmly in place.

The financing and operational calculus for businesses across the Gulf has shifted materially since the conflict began nearly seven months ago. US Central Command had redirected 103 commercial vessels as part of its blockade against Iranian maritime trade as of September 16, a figure that captures the scale of maritime disruption better than any general description. Iran is now requiring vessels transiting the Strait of Hormuz to obtain permission from its maritime authorities, adding a layer of regulatory and operational cost to every cargo moving through the world’s most critical energy chokepoint. Shipping companies, insurers and commodity traders are absorbing those costs directly.

Additional reference context is available at https://gulfnews.com/uae/us-iran-war-what-uae-residents-should-know-today-sept-17-1.500677592.

Saudi Arabia’s response illustrates how quickly major producers have had to improvise. Aramco is offering Arab Light, Medium and Heavy grades to Asian refiners via ship-to-ship transfers, a workaround that adds logistical expense but keeps volumes moving. Tanker Trackers, using satellite imagery, confirmed that greater volumes of crude oil, liquefied natural gas and liquefied petroleum gas are being exchanged through ship-to-ship transfers in the Gulf of Oman. The market has priced in some of this flexibility, hence the Brent retreat from higher levels, but the arrangement is costly and fragile.

Meanwhile, a second chokepoint is deteriorating. Iran-aligned Houthi forces have seized Yemen’s Mokha port and strategic islands near the Bab Al Mandab, raising the risk premium on Red Sea shipping. The United Nations says commercial traffic remains largely unaffected for now, but the Houthi advance has tightened the margin for error. Massad Boulos, the White House senior adviser on Arab and Middle Eastern affairs, disclosed at the Arab Media Summit in Dubai on Wednesday that Washington is conducting daily military coordination with the UAE and Saudi Arabia over security around Bab-el-Mandeb and the wider Red Sea. Daily coordination signals sustained operational commitment, and sustained commitment carries cost.

The direct attack on a US-contracted vessel near the Strait of Hormuz sharpened the risk picture further. Sources cited by Fox News reported that four Iranian drones and at least one missile targeted the ship, with one projectile striking it and causing minor injuries including smoke inhalation. The US military has not confirmed the incident and the weapons involved remain unverified, but the episode underscores the exposure facing commercial operators in the corridor.

On the diplomatic side, President Donald Trump stated Thursday that the United States is “hopefully toward the end” of the conflict and confirmed that Washington has maintained direct contact with Tehran regarding a possible settlement. Those comments represent the clearest recent signal from his administration of a potential exit. China is also engaged: Iranian Foreign Minister Abbas Araghchi travelled to China on September 16 for talks with Chinese Foreign Minister Wang Yi. The timing is deliberate, given that Chinese President Xi Jinping is expected to visit the United States later this month for discussions with Trump, positioning Beijing as a potential bridge between the two sides.

No ceasefire or agreement has been announced. Until one is, the economic disruptions compound.

Airlines are feeling the pressure acutely. Emirates, flydubai and Air Arabia have listed cancellations on regional routes as higher jet-fuel prices push up operating costs. Etihad’s services to Bahrain and Kuwait are largely running normally, a contrast worth noting for travellers and investors in those markets. Food and consumer goods prices are climbing as shipping and transportation costs feed through to imported products. Construction projects face rising expenses from elevated energy, transport and materials costs. The UAE adjusts fuel prices in line with international market conditions, meaning prolonged oil-market volatility flows directly into household and business budgets across the emirate.

For operators and investors, the key variable is duration. The longer the military operation persists, the greater the pressure on oil markets, maritime trade economics, airline profitability and the broader investment climate across the region. A diplomatic resolution would reduce that pressure, but the path from Trump’s Thursday comments to a confirmed agreement involves multiple parties, including China’s mediation role, Tehran’s conditions and the Houthi dimension in the Red Sea, none of which are resolved. The question for markets is whether the diplomatic signals harden into a deal before the economic costs of disruption become structural rather than cyclical.