Something odd is happening in the oil market. A recent report suggests that just over 80 percent of the Gulf’s previous flows of oil and petroleum products, excluding Iran, have returned. That sits awkwardly with the headlines, which still describe a region in turmoil, and with energy prices that remain stubbornly high. To find out why, it helps to follow the actual barrels rather than the news cycle.
Crude is back, but the route has changed
Before the conflict, around 83 percent of the Gulf’s non-Iranian crude oil exports passed through the Strait of Hormuz. By September that share had fallen to roughly 60 percent, with the rest taking other routes. Saudi Arabia has leaned on its pipeline to Yanbu on the Red Sea, while the United Arab Emirates uses Fujairah, a port that lies outside the strait.
Traffic through Hormuz itself now looks more like a shuttle service. Large crude tankers load inside the Persian Gulf, pass through the strait and transfer their cargoes to other vessels outside it. Those ships then make the long journey to refineries, mainly in Asia. At least 63 very large tankers appear to have taken part by the end of September. One American trading company, PIF Energy, is reportedly planning investments of around two billion dollars in up to 15 older supertankers to join these operations.
Add the strait and the alternative ports together and the total comes to around 16.5 million barrels of crude oil per day from the region, excluding Iran. That is close to pre-war levels. The catch is cost. More vessels, more transfers, more insurance and more capital are involved, so a growing share of the price now sits in moving the oil rather than in the barrel itself.
Iran sits outside these figures. Before the war it exported around 1.7 million barrels of crude a day, mostly to China. Iranian shipments through the strait have been almost completely halted by the American blockade, and China has been receiving oil that was already at sea rather than fresh cargoes. Iran can still disrupt shipping, which keeps a risk premium on everyone else’s barrels.
Refined fuels are the real bottleneck
Crude is comparatively easy to reroute. Diesel, petrol and jet fuel are not. Refineries in the region processed around 7.3 million barrels a day in August, compared with 9.9 million before the conflict. Some of that lost capacity could return fairly quickly if stored inventories clear and transport improves. Damaged facilities will take considerably longer.
Early October export data tells a stark story. Exports of finished fuels were still around 50 percent below their previous level, even though crude exports had almost recovered. Part of the reason is practical. Products need specialised tankers, and different fuels must be kept apart. The major alternative pipelines were built largely for crude, so it is easier to get another barrel of crude out than to replace a missing barrel of diesel.
Russia adds to the strain. Repeated Ukrainian attacks on Russian refineries mean that the Gulf and Russia together exported around 1.6 million fewer barrels of diesel and gasoil per day in August than in February.
Why diesel may matter more than the crude price
The argument that stands out to us is that the shortage of these products could matter more for inflation than the crude price alone suggests. Diesel moves trucks, powers agricultural machinery, mining and construction equipment, and runs large parts of industry. Jet fuel underpins travel and air freight. A brief disruption tends to produce a temporary price bump. When it stretches into months, higher costs can spread across transport, food and manufacturing.
One possible reading is that the inflation risk lies less in the headline oil price and more in the slow grind of product shortages. That interpretation is ours, not a settled conclusion, and it depends on how long the shortage lasts.
Supply responses outside the Gulf
China has the world’s largest refining industry, so its export policy matters. Its independent refiners have lost access to much of the cheap Iranian crude and now pay more for barrels from Iraq and Qatar, which has squeezed their margins. Beijing also controls how much finished fuel may leave the country and has capped domestic selling prices. Exports were set to resume on 9 October after a brief pause, with around 3.7 million tonnes approved for October. That is not a dramatic increase on September, but it shows the outlet remains open.
Elsewhere, Nigeria’s Dangote refinery, with capacity of around 700,000 barrels a day, is already supplying jet fuel to Europe. New refining capacity is being built in Asia and Africa, and strategic reserves can bridge the gap in the meantime.
Gas is a harder problem than oil
Qatar’s liquefied natural gas is a tougher case. Gas must be cooled into liquid form in very large facilities before it can be shipped. A pipeline to a port outside the strait would require new and very expensive liquefaction capacity on the far side. Qatar’s existing investment at Ras Laffan lies inside the Gulf, so rebuilding the system elsewhere is far from obviously sensible.
Some gas shipments have resumed, and greater US LNG supply could ease the shortage over time. Demand is adjusting too. Japan has restarted nuclear reactors, and in Europe more renewable power is reducing gas consumption. None of this solves every problem, but it shows the market adapting on the demand side.
What it means for inflation and interest rates
Short-term interest rates follow expectations for central bank policy, which in turn follow the inflation outlook. Long-term yields have other drivers. Large budget deficits, heavy government borrowing and investors demanding more compensation for locking money away over long periods all play a significant role. Private demand for capital, particularly from AI and energy infrastructure, adds to the pressure. None of these factors disappears simply because tankers move more freely through Hormuz.
Real interest rates are positive in several markets, and that matters for anyone comparing today with the 1970s. Policymakers then fell behind inflation and had to chase it with higher rates. High real rates cannot repair a damaged refinery, but they make a temporary energy shock less likely to become a broad inflationary spiral. It is entirely possible for energy-driven inflation to ease while long-term yields stay higher than many had expected.
A slower road, but a clearer one
The most useful chart in the set is a Kpler scenario tracking crude and finished fuel traffic through Hormuz as a share of pre-war levels. Rather than a sharp reopening after a peace agreement, it shows gradual recovery through 2027. The curves are not directly comparable with the total export figures, but they illustrate how normalisation may unfold: unevenly, with setbacks, yet in a clear direction.
Prices may also move faster than physical volumes. If more vessels are willing to transit and freight and insurance costs fall, risk premiums can shrink well before any comprehensive peace agreement. The counter-risk is obvious. Renewed attacks could follow, and damaged refineries and gas plants could stay offline for a long time.
What this could mean for iGaming operators
Oil is not a gambling story, and the source material says nothing about our sector. Still, three read-across points are worth considering, and they are our interpretation rather than findings. First, consumer spending. Higher fuel and food costs squeeze discretionary budgets, which is the pool operators compete for. Second, funding costs. Long-term yields shape what listed operators pay to borrow and how investors value growth. Third, event costs. Travel and logistics for live events and trade shows carry fuel-linked costs. How much any of this matters will vary widely by market and business model.
What to watch next
Crude has made the most progress so far. Finished fuels and LNG are lagging behind. If diesel, jet fuel and gas start moving in the right direction, some of the inflation pressure linked to the region should fade. Long-term yields, however, are likely to follow their own, more persistent drivers.
The market appears to be finding a workable, if cumbersome, route around the disruption. Whether that route becomes the normal one will depend on the products that keep trucks, aircraft and factories running. Keep an eye on the finished fuels data, and sign up for the Business of iGaming newsletter to follow future updates.
