Middle East Oil Exports Recover as Hormuz Tanker Costs Remain Elevated

Middle Eastern oil exports have moved above their pre-war average, but the cost and risk of moving crude through the Strait of Hormuz remain high. October exports averaged 17.3 million barrels per day, Kpler data showed, while VLCC freight rates for some voyages approached $1.4 million per day and insurance reached about 10% of cargo value.

That gap between recovering volumes and strained vessel operations is the central feature of the market described in a Reuters analysis by Ron Bousso dated October 22, 2026. More oil is moving, but the route depends on guarded convoys, elevated insurance costs and complex shipping arrangements. The figures do not indicate a return to routine tanker operations.

Hormuz flows are climbing, but remain below normal

Crude exports from the Middle East averaged 17.3 million barrels per day in October, compared with 16.4 million in September and a pre-war average of 16.9 million, according to Kpler. Oil shipments through Hormuz averaged 11.7 million barrels per day, up from 9.75 million in September. That puts traffic through the strait at about 82% of its pre-war level.

The increase has come in part from convoys using routes near the Omani coast under U.S. Navy protection, Reuters reported. Vessel tracking data also indicates that roughly one-third of Hormuz transits continue to use the northern route controlled by Iran. The split matters operationally: traffic is moving through more than one corridor, while the convoy pattern shows that vessel passage remains dependent on protective arrangements.

For shipping teams, aggregate export totals don’t show how evenly vessels can move or what resources each transit requires. A rise in barrels shipped can coexist with longer planning horizons, added coordination and higher costs for the tanker capacity assigned to the route. The source does not give transit times or queue lengths, so those effects can’t be quantified from the reported figures.

Reported attacks and insurance costs weigh on voyages

The United Kingdom Maritime Trade Operations (UKMTO) said it received reports of 12 attacks in and around Hormuz over the previous week, the highest weekly total recorded by the agency. UKMTO cautioned that the actual number may be higher because some vessel operators do not report incidents for commercial or security reasons.

The reported attacks add uncertainty to voyage planning and insurance decisions. Reuters put the current insurance cost at about 10% of the value of the oil being carried, compared with around 3% before the conflict. That increase applies pressure to the economics of each cargo even as export volumes rise. The report does not specify how premiums vary by vessel, route or voyage, so the 10% figure should be read as the reported level rather than a uniform quote for every shipment.

Freight costs are also sharply elevated. VLCCs carrying about 2 million barrels of crude from the Middle East to China were commanding daily rates near $1.4 million, more than 12 times the pre-war level. For charterers, a rate expressed per day makes the time spent on a voyage a direct cost factor, while the high rate reflects the expense of securing this vessel capacity under current conditions.

Delivered sales shift more transport responsibility

Rising transport costs have prompted Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) to sell oil to some customers in China and India on a delivered basis, Reuters reported. Under the traditional arrangement described in the analysis, oil is sold at the loading port. Delivered sales move the transaction point, placing more of the transport process within the seller’s delivery commitment.

That change can affect how sellers and buyers allocate responsibility for arranging carriage and meeting delivery terms. The source does not detail the contract terms or explain how the added freight and insurance expense is divided between parties. It does, however, show that producers are changing sales arrangements as transport becomes more costly and difficult to plan.

Yanbu adds an alternative export route

Saudi Arabia’s Red Sea shipments from Yanbu also contributed to the increase in regional exports. Following a September attack on an oil pipeline that disrupted shipments, Yanbu volumes rose to an average of 3 million barrels per day in October. That remained below the 4.3 million barrels per day reached at the wartime peak in June, but the recovery was faster than expected, according to the source.

The Yanbu figures show how exports through a route outside Hormuz can support total regional flows. They don’t establish how much crude was diverted from other routes or how much additional capacity remains available. For shippers tracking supply, the distinction between total exports and the route used to move each barrel remains important.

Prices reflect concern about continuity

Brent crude rose to about $110 per barrel, its highest level since May. The Reuters analysis attributed the rise to concern that shipments could become less sustainable if conflict in the region intensifies again, rather than to a shortage in current oil supply.

Market activity points to the same uncertainty: HiLo Analytics data showed daily trading volume in ICE Brent oil options topped 1 million contracts on Tuesday, a record. The analysis said producers and tanker operators have maintained exports through new transport methods, but those methods rely on protected convoys, high insurance and freight charges, and transfers involving multiple vessels.

The practical signal for cargo planners is that stronger export totals alone don’t describe the reliability or cost of moving crude. Hormuz volumes have recovered substantially, while freight, insurance and route arrangements still reflect constrained operations. Whether those costs ease will depend on the continuity of shipping through the strait and the ability of alternative routes such as Yanbu to sustain their contribution.

Source: SeaNews Türkiye