Does the return of oil flows through the Strait of Hormuz mean the energy crisis is over?
At first glance, there are signs of normalization. Crude exports from the major Middle Eastern producers reached around 12.8 million barrels per day in September, while oil flows through the Strait of Hormuz are estimated at approximately 7.4 million barrels per day. Yet these volumes remain about 6 million barrels per day below pre-war levels.
At the same time, commercial vessel traffic through Hormuz remains sharply below its previous level, while reports have emerged of two tankers and an LPG carrier being hit in recent days. The details and responsibility for these incidents have not been independently confirmed.
From this perspective, the central problem facing the market is no longer simply whether oil exists. It is whether that oil can be delivered to its destination.
That distinction is critical under current conditions.
Saudi Arabia has managed to redirect part of its eastern-bound exports to compensate for the disruption at Yanbu. But the resulting increase in seaborne movements has raised demand for VLCCs and pushed ship-to-ship (STS) transfer capacity in the Gulf of Oman toward its operational limits. Around 60 million barrels of Saudi crude have reportedly been scheduled for STS transfers off Sohar. This has increased vessel turnaround times, reduced effective fleet availability and pushed up freight costs.
Some of these movements are also taking place with AIS transponders switched off or inactive, while reports have emerged that some voyages have been facilitated or accompanied by US forces. Such practices can make observed vessel traffic appear lower than actual movements, without necessarily reducing the underlying operational risk or cost.
The result is a structural contradiction in the market: more oil is available at the point of origin, but moving that oil to the end user has not necessarily become easier or cheaper.
A recent report concerning the alleged interception of 19 vessels by Iranian forces highlights the same risk from another angle. Iran’s Fars News Agency reported that 12 vessels on Friday night and seven on Saturday night had been targeted or intercepted after allegedly travelling outside a designated route. No independent details have emerged regarding the vessels’ names, flags, cargoes or ultimate fate, and the claim cannot therefore be treated as confirmation of 19 attacks on commercial shipping.
For market analysis, however, the significance lies in the additional operational uncertainty rather than in treating the reported number as a confirmed attack count.
For a shipowner, insurer or crude buyer, maritime risk is not limited to the probability of a vessel being damaged or sunk. Uncertainty over permitted routes, transit windows, STS availability and liability in the event of an incident can all become part of the effective cost of a voyage.
This helps explain the market’s behavior.
A barrel sitting at Ras Tanura, a barrel aboard a VLCC transiting Hormuz and a barrel already sitting in an Asian destination tank are not equivalent in terms of supply security. This is why destination storage and alternative routing have become increasingly important for Saudi Arabia.
For an Asian refiner, the relevant benchmark under such conditions is no longer simply the FOB price. It is the delivered cost of crude, including freight, war-risk insurance, STS charges, waiting time and demurrage—the contractual cost associated with keeping a vessel beyond its agreed laytime.
The same logic extends beyond crude oil.
In the LNG market, the restoration of navigational access through Hormuz does not necessarily mean that Qatar’s LNG production capacity has been fully restored. Damage to facilities at Ras Laffan has taken part of Qatar’s LNG capacity offline, and the repair of some units is expected to take considerably longer than the restoration of shipping access.
The production clock and the transportation clock, therefore, are not the same.
The reopening of a shipping route can facilitate the movement of available LNG, but it cannot immediately restore liquefaction capacity that has been physically damaged.
A similar dynamic is visible in refined products.
Reduced Middle Eastern diesel exports, combined with high refinery utilization rates, have narrowed the market’s room for a rapid supply response. Potential restrictions on US diesel exports should not be treated as a confirmed supply reduction until they become actual policy. But if such restrictions were to result in the rapid accumulation of inventories and eventually force refiners to reduce run rates, the consequences could move beyond diesel into gasoline, jet fuel and, ultimately, refinery demand for crude oil.
The global energy market is therefore not confronting a single shock. It is dealing with several interconnected bottlenecks.
On one side, Middle Eastern crude supply is recovering, while the return of Libyan production is easing some pressure on the Mediterranean market. On the other, effective shipping capacity, STS availability, insurance coverage and transit times remain constrained.
In LNG, the restoration of transportation capacity does not necessarily coincide with the restoration of Qatar’s production capacity. In refined products, meanwhile, constraints on refining capacity can amplify the pressure on supply.
Under these circumstances, one of the most misleading analytical shortcuts would be to interpret a decline of several dollars in oil prices—or a diplomatic headline—as evidence that the crisis has ended.
Following Donald Trump’s rejection of Iran’s proposal, Tehran has continued to signal its readiness for diplomacy without changing its stated conditions. Trump, while rejecting the proposal, has also indicated that further talks could continue.
At this stage, therefore, neither an imminent agreement nor a definitive breakdown of diplomacy can be assumed.
For the market, the more important question is whether the political environment will translate, over the coming days, into observable changes in the behavior of ships, insurers and cargo owners.
The Likely Market Path
If diplomatic channels remain open and no new maritime incident occurs in the coming days, the most plausible path is gradual rather than abrupt normalization.
The first adjustment would likely be a reduction in geopolitical and war-risk premia. Freight rates and STS queues would then begin to ease, followed by more regular arrivals of Middle Eastern crude at Asian refineries. Oil prices could decline before Middle Eastern exports fully return to their pre-crisis levels.
The reverse is also possible. A significant maritime incident or tighter restrictions on navigation could quickly expose the fragility of the current system: higher insurance costs and freight rates, longer voyages, lower effective VLCC availability and higher delivered crude costs for Asian refiners.
In that situation, the market could again face a deliverability shortage, even without a major decline in global oil production.
For the week ahead, therefore, the market should be monitored through four operational indicators rather than through Brent alone:
1. The actual number of VLCCs exiting Hormuz, rather than reported vessel-traffic statistics alone;
2. Waiting times for STS operations in the Gulf of Oman;
3. Freight rates and war-risk insurance premiums;
4. The timing and volume of Saudi and Iraqi crude arrivals at Asian ports and refineries.
If all four indicators improve simultaneously, the market can reasonably be considered to be moving toward genuine normalization.
If oil prices decline while these physical indicators remain under pressure, however, the price move should be interpreted with caution.
The central issue in the current market is not an absolute shortage of barrels. It is their deliverability.
A barrel at Ras Tanura, a barrel aboard a VLCC transiting Hormuz and a barrel already stored at its Asian destination do not have the same operational value in terms of supply security.
That distinction may ultimately determine, over the coming weeks, the gap between the price displayed on trading screens and the physical reality of the global energy market.
