Oil Flows Through Hormuz Now Top Prewar Levels, Kpler Data Shows

Oil shipments through and around the Strait of Hormuz averaged more than 24 million barrels a day last week — above the 23.3 million barrel prewar average, according to tracking firm Kpler. Eight months into the war that the U.S. and Israel launched in late February, the world's most feared chokepoint is moving more crude than before the fighting began.

That headline number deserves scrutiny. Iran has stepped up attacks on tankers in the strait, and traffic has not returned to normal because the threat continues to scare off some shipowners. Enough vessels keep transiting, though, because the payouts for doing so are lucrative. In short, risk is being priced, not eliminated.

Pipelines that bypass the strait are also picking up the slack, and top oil consumers have cut demand. The result: some Middle East crude grades in Asia now sell for less than they did a month ago, sources told Bloomberg. Brent crude has surged in recent days on reports that the U.S. and Israel are preparing another attack on Iran, but prices remain below the peaks reached at the height of the war.

What do the banks expect next?

JPMorgan analysts, in a Wednesday note, framed the situation bluntly: "Energy security shocks are persistent, not episodic, and supply-chain and shipping disruptions remain material risks. Energy markets are converging on a forever conflict in the Middle East, but supply has been resilient and demand destruction in China has been key."

A survey of the bank's investors found that more than half expect Middle East disruptions to keep energy prices "structurally elevated" over the next 12 months. Even so, JPMorgan argued that if supplies stay constrained for another year, demand destruction could hold oil around $90 per barrel — well below the $120-$140 range some forecasters fear.

The analysts added: "Repeated supply shocks are driving a lasting reconfiguration of trade routes and energy corridors, and tail risks remain elevated. Building resilience in supply chains has become a priority."

The caveat is obvious: those forecasts assume the conflict stays within its current bounds.

Can infrastructure outbuild the risk?

Hamad Hussain, a senior commodities economist at Capital Economics, wrote in a note last week that expanded pipelines and port infrastructure will improve the resilience of oil flows over the longer term. Some of the fixes are near-term.

• Saudi Arabia plans to convert an existing natural gas pipeline to carry 1.2 million barrels per day of oil, boosting its ability to ship crude to its west coast within six to eight weeks, Hussain estimated.
• The United Arab Emirates should complete a second pipeline to its port at Fujairah next year, allowing even more oil to bypass the Strait of Hormuz.

"Energy markets are learning to live with conflict," Hussain wrote. Markets, however, cannot live with unlimited conflict.

Why hasn't the region's oil infrastructure been destroyed?

Iran has warned that any fresh U.S.-Israeli attacks would target not only energy infrastructure but also the region's data centers and internet cables. Such strikes would likely trigger similar retaliation against Iranian infrastructure, sparking tit-for-tat exchanges that would threaten the region's long-term ability to pump and ship oil — and could catalyze a far worse energy crisis.

TankerTrackers posted on X last week: "Wiping out an oil terminal opposite of Iran is equivalent to Mutually Assured Destruction (MAD). How eager is Iran to see its (albeit now-sleepy) Kharg Island oil terminal finally go up in flames? There are lines one simply doesn't cross even during conflict."

The U.S. has shown restraint of its own. President Donald Trump earlier threatened to destroy an Iranian bridge or power plant each time Tehran attacked a ship in the strait; he has not followed through. Instead, Trump has favored economic warfare — a U.S. naval blockade choking off Iran's oil exports and financial sanctions preventing Tehran from repatriating revenue generated abroad.

Is there an endgame?

Another aircraft carrier and a Marine expeditionary unit are headed to the region, and renewed fighting could still plunge the Middle East into a cycle of destruction. Yet Trump has backed off earlier vows to restart all-out war.

Mike Waltz, Trump's ambassador to the United Nations, admitted to the Financial Times that the U.S. could remain locked in a stalemate with Iran a year from now — without a deal on Tehran's nuclear program or the Strait of Hormuz. "The president and the U.S. Navy can maintain this blockade for the foreseeable future," he said, adding that the administration is "tightening" its economic pressure.

The so-what: oil markets are settling into a durable equilibrium — elevated prices, resilient supply, and a standoff both sides calculate they cannot afford to break.