Oil flows rebound as Iran turmoil eases, yet prices keep rising

Shipments adapt to disruption

Oil producers have found ways to keep supplies moving despite instability in the Middle East. Shuttle boats transfer oil through the strait to tankers waiting beyond the danger zone.

Other exports avoid the strait using Saudi Arabia’s East-West pipeline, which connects eastern oil fields to Yanbu on the Red Sea. The United Arab Emirates also uses its Habshan-Fujairah pipeline.

Moving oil remains costly

Shipping is still neither smooth nor dependable, said Isabel Figuerola-Ferretti, an oil markets expert at Comillas Pontifical University. She cautioned that moving barrels should not be mistaken for a return to normal conditions.

Freight charges have reached $40 per barrel in recent weeks, about 10 times the usual rate, according to London Stock Exchange Group data. Elevated insurance premiums and logistical difficulties have contributed to the increase.

Supply risks sustain prices

Brent crude front-month futures rose more than 2 percent on Friday, briefly passing $117 a barrel. Oxford lecturer Adi Imsirovic said the market reflects available oil in the near term as well as the risk that the war could escalate.

Export data has shown shipments reaching pre-war levels at times, but the broader supply picture remains uncertain. September figures from the International Energy Agency showed OPEC Gulf production at 15.8 million barrels per day, or 75 percent of its pre-war baseline, Molchanov said.

Oil stockpiles are declining, adding to concerns over supply. Molchanov said production was unlikely to exceed 85 percent of pre-war levels without a permanent diplomatic solution, while few analysts expect prices to normalize soon.