Crude shipments increase slightly, but security threats persist in the region
Category: Business
As the United States prepares a new wave of economic sanctions against Iran and its trading partners, shipping traffic through the Strait of Hormuz has remained alarmingly low. On August 26, 2026, only ten vessels transited the strait, an increase from eight the day before, but still below the ten-day moving average of approximately 15 vessels, according to data from the commodity intelligence platform Kpler.
This decline in traffic occurs against the backdrop of a nearly six-month-long war in Iran and the imposition of U.S. sanctions. The situation has prompted Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani to engage in talks with Iranian officials in Tehran, emphasizing the importance of respecting freedom of navigation in the Strait of Hormuz in accordance with international law. Al Thani's visit on August 27, 2026, highlighted the urgent need for dialogue as tensions remain high in the region.
Meanwhile, Iranian and Omani officials have indicated progress on a framework agreement aimed at establishing a temporary safe shipping route through the strait, alongside mine clearance operations intended to restore safe navigation. This development comes as the Iranian Islamic Revolutionary Guard Corps (IRGC) announced a revenue-sharing agreement with Oman concerning the strait's waters and revenues, a move that could provoke backlash from U.S. officials.
Prior to the outbreak of conflict, the Strait of Hormuz was a key conduit for global oil, with approximately 20 percent of the world's oil supply passing through it. The recent escalation of violence has led to increased risks for vessels traversing the strait, evidenced by two separate projectile strikes on oil tankers on August 24 and 25, 2026. Fortunately, these incidents resulted in no casualties or pollution.
In response to the heightened security risks, the United Kingdom Maritime Trade Operations Centre (UKMTO) has reported that the Kuwaiti-flagged oil tanker Al Salam II was struck by an unknown projectile, igniting a small fire that was quickly extinguished by the crew. This incident marked the second reported strike on a Hormuz-traversing oil tanker in just three days, underscoring the precarious nature of maritime operations in the region.
As the situation continues to evolve, the impact on global oil prices remains a focal point. Estimates suggest that crude shipments through the Strait of Hormuz have risen to between six million and eight million barrels per day, approximately half of prewar levels. This increase is attributed to Gulf producers ramping up exports, even as security threats loom. The higher regional loadings and shuttle-tanker operations have helped stabilize oil prices, which were trading around $88 per barrel as of August 27, 2026.
In a notable shift, Iraq's state oil marketer, SOMO, has begun offering buyers the option to collect crude oil supplies via ship-to-ship transfer near the Omani coast, a strategy aimed at circumventing the dangers posed by the Strait of Hormuz. This tender, which closes on August 28, 2026, marks the first time Iraq has provided such an option since the onset of the Iran war. The move is seen as a way to maximize economic benefits for the Iraqi government, which has struggled with disrupted exports in recent months.
Prior to this development, Iraq had been offering steep discounts to encourage traders to load oil directly from its Basra terminal, which has been severely impacted by the conflict. In July 2026, Iraq's southern crude exports averaged about 1.4 million barrels per day, a slight increase from 500,000 barrels per day in June and 100,000 barrels per day in May, but still significantly below prewar levels of over 3.3 million barrels per day.
As Iraq navigates these challenges, it has entered agreements with various companies to transport crude through secure routes outside the strait. This strategy aims to maintain a steady flow of oil to global markets, even as the threat of attacks continues to loom over maritime operations. The situation remains fluid, with shipping threats persisting and global oil prices fluctuating in response.
The geopolitical dynamics in the region are complex, and the potential for renewed negotiations between the U.S. and Iran could have consequences for shipping and oil prices. With the U.S. blockade still in effect, Iran's crude exports remain halted, complicating the broader picture of oil supply and demand.
As the situation develops, stakeholders in the oil market will be closely monitoring the outcomes of diplomatic efforts and the potential for a more stable shipping environment in the Strait of Hormuz. The coming days will be telling, particularly as Iraq's tender for ship-to-ship transfers approaches its closing date and the international community watches for any signs of progress in U.S.-Iran relations.
With global oil prices hovering around $88 per barrel and the risk of shipping disruptions still present, the stakes are high for all parties involved. The next few weeks will be instrumental in shaping the future of oil exports from the region and determining the extent to which the conflict in Iran continues to impact global markets.