Middle East oil producers are finding more ways to evade Iranian threats and push more of their product to market

Ships are anchored in the Strait of Hormuz earlier in August. Ship-to-ship transfers have bumped up oil flows from the region in recent days.

The flow of crude through the Strait of Hormuz has crept higher in recent days as Mideast oil producers find more ways to push their product to markets and sidestep Iran's attacks and threats, helping to stabilize crude-futures prices.

A lot of that is due to ship-to-ship transfers of oil. It's a relay race of sorts that has picked up speed in recent days - one involving massive oil tankers trying to stay one step ahead of the risk posed by Iran when transiting Hormuz to keep the world supplied. In these situations, two ships are essentially teaming up to move crude out of the Persian Gulf.

Shuttle tankers belonging to Middle East state-controlled oil companies are hauling crude from the Persian Gulf through the Strait of Hormuz and into the Gulf of Oman. This is the riskiest part of the voyage and the state oil companies are now more willing to shoulder this burden. Once on the Gulf of Oman side of the strait, waiting tankers from buyers such as Asian refiners - many of which remain wary of crossing the strait themselves - pick up the oil through ship-to-ship transfers and then sail to their destinations. Those buyers pay extra for the oil as a result.

"[Sellers] take the risk and the buyers are willing to buy that crude for a premium," said Matt Smith, an analyst with commodity-analytics company Kpler.

Kpler recently added the ship-to-ship transfers to its oil-flow estimates, which resulted in a bump to its unconfirmed estimates of how much oil is flowing out of the Persian Gulf to as much as 15 million barrels a day in mid-August.

Analysts at Goldman Sachs said in a recent note that they used a different methodology, combining Kpler data with other sources and its own calculations, to arrive at slightly higher estimates of Persian Gulf exports of about 15 million to 16 million barrels a day for oil and oil products.

That's still about 7 million to 8 million barrels a day below pre-war levels, but 5 million to 6 million barrels a day above a March trough, Goldman Sachs said.

Ship-to-ship transfers as well as continued "dark" crossings - where ships transit the Strait of Hormuz with their GPS-like signals turned off to evade detection - show that producers and shippers not only are adapting to the Mideast conflict but also pricing in "disruptions likely continuing well into 2027," the Goldman analysts said.

Energy Secretary Chris Wright said on X last week that the U.S. military helped ship "over 15 million barrels of oil and products out of the Strait of Hormuz - combined with pipelines, the total leaving the region is closer to 20 million barrels." The seven-day average of oil leaving the strait was more than 8 million barrels a day, he added.

"Make no mistake, thanks to the U.S. Navy, oil is flowing through the Strait of Hormuz," Wright said in his post.

Unnamed U.S. officials told Axios last week that "Iran has lost much of its control over the strait and the U.S. military is effectively controlling most of it."

Crucial but shaky Mideast export estimates have been tripping up Wall Street analysts since the start of the war in late February. Satellite imagery that could aid in more precise tracking is often delayed or not available.

Ship-to-ship transfers and dark transits

Ship-to-ship transfers do not require any particular engineering feats, as they have been routine elsewhere in the energy world.

"Dozens" of empty Very Large Crude Carriers, or VLCCs, are waiting for their cargo in the Gulf of Oman, Smith said, declining to offer a specific number.

The shuttle ships transit closer to the Oman side of the strait and presumably benefit from some protection from the U.S. Navy, he added.

"We are seeing all the VLCCS in the Gulf of Oman, and then off they go," Smith said.

The dark transits, delayed satellite imagery and other hurdles to keeping track of Hormuz flows contributed to the more recent data being subject to upward revisions, Smith said. The Middle East oil companies are also moving more oil to the Red Sea through pipelines, further expanding their export totals.

"Nonetheless, Strait of Hormuz transits remain subdued, well below pre-conflict levels, about 8 million barrels a day for total petroleum liquids, versus a pre-war level of about 21 million barrels a day," he said.

Fighting flared around the Strait of Hormuz over the weekend, boosting crude futures on Monday despite the deal announced late Friday for Venezuelan oil; both New York-traded West Texas Intermediate (CL00) and London-traded Brent (BRN00) oil futures rose nearly 3%.

WTI futures gained about 1.4% for the month, while Brent crude futures, which historically react more deeply to geopolitical upheaval, gained about 3%.

Energy markets have been relying on a combination of demand destruction, especially from Asian countries, which were the top importers of Mideast crude and products, and sourcing crude from other countries, including the U.S., to get by without the full Hormuz flows.

Serious bottlenecks have shifted to the refining stages, with the margins that oil refiners demand for producing fuels like gasoline, heating oil and diesel climbing to records in recent weeks.

The U.S. is also pinning some of its hopes on the deal it has made with Venezuela for that country's crude. U.S. oil executives are slated to return to the White House on Tuesday to meet with President Donald Trump, focusing in large part on reducing gasoline prices.

-Claudia Assis