“At least 16.5 mbd left the region between September 1 and 28, matching the pre-war average excluding Iran. That is 10.5 mbd above March’s monthly average,” said data from ship-tracking firm Kpler.

“The volume recovered. The route did not. Before the war, 83% of the region’s crude crossed Hormuz. In September, 40% left without crossing the strait. Of the crude that did cross in August, more than 70% changed tankers offshore in the Gulf of Oman,” the agency noted, suggesting that the Middle East players might have been successful in adding the “Hormuz Plus One” scenario in their operational plannings.

Kpler, known for its methodology of combining vessel tracking, satellite imagery, draught changes, port data, market sources, and destination checks to prepare maritime traffic data, found tankers crossing the Strait with their AIS transponders off.

Other methods included cargoes changing ships in open water, while Saudi Arabia successfully diversified its energy exports between the Gulf and the Red Sea.

“When the war closed the strait on February 28, the seven-day average of non-Iranian crude leaving the region fell by 72% in 10 days, to 4.5 mbd. It has since climbed back through three exits instead of one. In September, 60% of the energy consignment (9.9 mbd) physically crossed Hormuz, mostly using shuttle tankers. 23% of them loaded outside the Strait, on the Gulf of Oman coast (primarily Fujairah). Another 17% left through the Red Sea,” Kpler said.

While the confirmed volume of crude oil crossing the Strait remains more than a quarter below pre-war levels, the alternative routes have more than doubled and account for almost exactly that difference.

“The workaround changed almost month by month. March belonged to the pipelines: 97% of non-Iranian crude leaving the region bypassed Hormuz. By May, a shuttle system had taken over the strait, with 86% of the crude crossing it changing tankers in the Gulf of Oman,” Kpler noted further.

Decoding the new normal

Saudi Arabia has pushed crude west through the East-West Pipeline to Yanbu on the Red Sea.

“Saudi Red Sea loadings rose from 0.75 mbd before the war to 4.3 mbd in June, as the Yanbu bypass took over from the Gulf coast. The UAE sent crude through the Abu Dhabi Crude Oil Pipeline to Fujairah, where loadings rose from 1.1 mbd to 2.7 mbd,” Kpler said.

Kuwait, Qatar, and most of Iraq have no route around the Strait. Their recovery had to come back through Hormuz.

“Crude crossing the Hormuz came back dark. Iran designated transit corridors through the strait. On those corridors, tankers broadcasting their Automatic Identification System (AIS) signal fell from 13 trades in March to none by May,” said Kpler, using its analysis of the shuttle corridors.

As of now, some of the dark tankers are not switching AIS back on until they are as far away as southern India.

“Kpler confirms each crossing from imagery, draught changes, and checks at the destination port. Radar sees through cloud, dust, and darkness: on 21 September, Sentinel-1 imagery showed five tankers loading at once at the Al Basrah Oil Terminal, none broadcasting a position there. Kpler identified all five,” the agency noted.

Instead of carrying a bulk of the crude on a single tanker, exporters are using the method of loading inside the Gulf, followed by using a shuttle tanker to cross Hormuz, transfer off Fujairah or Sohar, and then using the long-haul tanker to send the consignment to Asia or Europe.

“At least 63 VLCCs now work the shuttle trade. A core fleet of 35 has completed at least 3 round trips each, typically about 16 days apart, and accounts for three-quarters of shuttle voyages. Dozens of VLCCs now spend months shuttling between Gulf terminals and transfer points outside Hormuz rather than carrying crude to the final buyer,” Kpler noted.

The shuttles load mostly at Basrah, Zirku, Mina al-Ahmadi, and Das Island. Saudi crude has joined since July, though most Saudi cargoes sail direct on the national fleet. Transfers split almost evenly between Fujairah (54%) and Sohar (45%).

While the Gulf of Oman used to see very few incidents of crude changing the tankers, the Iran war has changed the practice.

More than 70% of the crude that crossed the Hormuz in August involved tanker changeovers.

“That share is now easing, as loadings outgrow transfer capacity and exporters shift to direct voyages,” Kpler said.

On September 20, VLCCs (Very Large Crude Carriers) occupied all six offshore loading moorings at the Juaymah terminal.

Current status at the Red Sea

The Red Sea route also came under pressure during the initial months of the Iran war. On July 20, Yemen’s Houthis declared a maritime embargo on vessels serving Saudi ports.

Saudi crude through the Bab el-Mandeb strait then fell from above 3.5 mbd to a few hundred kbd in August, as Yanbu cargoes turned north through Egypt’s Sumed pipeline. On September 10, an attack on the East-West Pipeline halted energy loadings at the Yanbu port.

“Satellite imagery captured the switch from one coast to the other and back. On September 13, Kpler imagery showed no tankers at the Yanbu Crude and Muajjiz terminals. Seven days later, all six Juaymah moorings on the Gulf coast were occupied. By 27 September, as the pipeline restarted, all seven Yanbu berths were full again,” the agency noted.

The flows followed. Confirmed Saudi crude crossing Hormuz jumped from 0.7 mbd in August to 2.8 mbd in September.

The Kingdom led September with at least 5.1 mbd of confirmed crude, or 5.6 mbd with the Red Sea cargoes that are most likely Saudi. The UAE followed at 3.2 mbd and Iraq at 2.6 mbd.

“Another 3.4 mbd has left the region yet without a confirmed country, most of it crude that changed tankers in the Gulf of Oman without satellite imagery to confirm their respective shuttles,” Kpler said, while labeling the consignment “by geography” until the chain back to the loading terminal is proven.

The buyers changed less than the routes. In August, Asia still took 84% of the region’s crude, against 87% before the war. Egypt, Europe, and the wider Mediterranean nearly doubled their share to 16%, as Saudi Red Sea cargoes turned north.

India’s imports of Middle East crude are back at pre-war levels, near 3.0 mbd in September.

Iran excluded from “Hormuz Plus One”

While other Gulf producers have rebuilt routes around and through Hormuz, Iranian energy flows have moved with American policy rather than logistics.

In March, Iranian crude accounted for 1.6 mbd of the 1.8 mbd still crossing the Hormuz.

A US naval blockade from April 13 pushed crossings close to zero by May.

The June 17 MoU and a temporary oil waiver brought the ratio back to 1.1 mbd by the month-end, before the waiver was revoked and the blockade reimposed in July.

“Iranian crossings have stayed near zero since. Talks resumed on September 22, but Washington rejected an Iranian offer to reopen the strait within seven days if the blockade was lifted,” Kpler said.

Iranian crude stocks rose by about 20 mb from mid-February to late May, then drew down as exports resumed in June, and have held near 67 mb since mid-August.

Iranian crude appears to be hiding among the barrels without a confirmed country. More than half of those with a known destination went to India, South Korea, Taiwan, Japan, and Europe. Since March 2025, those markets have taken just 4 mb of Iranian crude, against 382 mb for China,” the agency said.

Iran, on average, used to export 1.7 mbd oil before the war. The absence of Iranian oil explains the difference between September’s export levels, which match pre-war levels when excluding Iran, and those that reach 91% when including it.

Tanker still facing attacks

However, attacks on tankers continued in and around the ‌Strait of ⁠Hormuz, with at least seven incidents reported, shipping intelligence firm Marisks said in a report on Saturday.

The enormous crude carrier Kazimah III was reportedly struck on October 1 by an unknown projectile while operating in the Strait, causing a fire onboard the tanker.

As per the Kpler data, Kazimah III was last seen discharging two million barrels of Kuwaiti crude at ⁠the Ras Markaz port on the coast of Oman on September 17.

The United Kingdom Maritime Trade Operations agency has reported at least one attack a day in the Strait of Hormuz ⁠or in the Gulf of Aden since October 2.

Marisks said merchant vessels transiting the Strait of Hormuz face a “heightened and increasingly unpredictable kinetic threat” given the recent sharp increase in traffic.

“Current intelligence suggests that the recent pattern of incidents may not necessarily represent deliberate targeting of ⁠individually selected merchant vessels,” the shipping intelligence firm noted.

“Instead, available information indicates the possibility that Iranian forces are launching missiles into a predetermined engagement area, or ‘kill box,’ with weapons potentially acquiring and locking onto available radar signatures within that area,” it concluded.

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Dangote and Kenya’s ⁠President William Ruto broke the ground for the USD 16 billion project in Kenya’s Lamu county this week.

Honeywell and Dangote worked together at his Nigerian refinery, where the company is helping with upgrades ‌to ⁠double the plant’s capacity to 1.4 million bpd.

“Through our long-standing relationship with Dangote, we have developed proven large-train engineering designs that can be ⁠applied to the Kenya refinery to significantly reduce time-to-market,” Honeywell Technologies UOP President Rajesh Gattupalli said ⁠in a statement.

The refinery will supply diesel, petrol, and jet fuel to Kenya, ⁠East Africa’s largest economy, with products also exported to countries across the continent.

Kenya is making a significant investment in the project, as it has the potential to reduce fuel costs in East Africa and conserve hard currency that is typically used to import refined products.

Dangote, often known as Africa’s richest man, has offered regional governments a combined 30% stake in the Kenyan refinery, which is scheduled to be completed in 2030.

While Honeywell will provide the technological support for the facility, Engineers India Limited will look after the project engineering part.

“The refinery, whose shares will eventually be listed on the Nairobi bourse, is the largest-ever foreign direct investment for Kenya, and it will boost the country’s annual gross domestic product by 12%,” Ruto said at the launch ceremony.

“It is an ⁠investment in energy security, industrialisation and regional integration,” the Kenyan President added further.

“The project will create energy self-sufficiency in a region stretching from Ethiopia to Mozambique by replacing imports of refined products,” Dangote said.

“We are breaking ground for a new chapter in Africa’s industrial journey to a brighter future,” he noted further.

Dangote and Ruto were joined by Ethiopia’s Prime Minister Abiy Ahmed, Uganda’s President Yoweri Museveni, Benin’s President Romuald Wadagni, and Togo’s President Jean-Lucien Savi de Tove for the ceremony at the port of Lamu.

The new refinery’s strategic location at the Lamu County will also help the prospects of the strategically crucial port, situated along Kenya’s northern shoreline, which welcomed its first cargo ships in 2021.

The Ruto administration sees Lamu Port as central to Kenya’s bid to open a new transport corridor linking its vast northern region and neighbouring African countries to the sea.

As per David Ndii, Ruto’s chief economic adviser, the refinery is expected ‌to boost ⁠Lamu Port’s transformation as the entry point of a new African transport corridor while addressing annual demand for petroleum products in the region, which has an estimated demand of 20 million to 30 million metric tons.

“The refinery will also aim to export jet fuel to the European and British markets,” Dangote said further.

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The Ima development, located across Oil Mining Leases 112 and 117 in shallow waters near Bonny Island in Rivers State, is expected to begin production in 2028.

It is designed to reach a plateau of about 350 million cubic feet of gas a day, although Nigeria’s state oil company NNPC has cited peak output of around 300 million standard cubic feet a day.

The field was discovered in 1973 but remained undeveloped for more than five decades. Its development comes as Nigeria seeks to bring stranded gas resources into production and strengthen supplies to domestic and export markets.

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The Kingdom’s crude oil production increased to 8.135 million bpd from June’s ratio of 7.122 million bpd. However, the JODI website, which displays monthly export data for OPEC member countries, stated that Saudi’s refinery crude throughput declined by 0.020 million bpd to 2.478 million bpd in July from 2.498 million bpd the previous month.

Direct crude-burning, on the other side, decreased by 22,403 bpd to 561,097 bpd.

While UBS analyst Giovanni Staunovo linked the increase in Saudi ⁠crude and product exports with slowing down of the regional conflict, he added that exports could be weaker in August, particularly from Red Sea terminals, due to the renewed tensions involving the Iran-backed Houthi rebels.

Meanwhile, Saudi Arabia ‌has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu, as per the reports.

Drone attacks, which Saudi Arabia has blamed on Iraqi ⁠militia, forced the Kingdom to shut the pipeline on September 11, halting crude loadings at the Yanbu Port.

As the Iran war began in February, Tehran, in retaliation to the US-Israeli joint airstrikes on its territories, put an embargo on the energy trade activities through the strategically crucial maritime chokehold called the Strait of Hormuz.

Riyadh, to bypass the roadblock, has been using the East-West Pipeline to reroute around four million barrels per day—around 4% of global supply—to Yanbu.

While the pipeline is pumping at a low rate after its restart, state-run oil giant Saudi Aramco is reportedly seeking to get the pumping rate back to four million bpd. The pipeline has a capacity of seven million bpd.

Reaching a rate of 40% of capacity will take ‌a ⁠couple of days, and a full restart will take six to eight weeks, a security source told Reuters.

Another oil industry source said a return to full pumping rates would take up to six weeks.

Three of the 11 pumping stations serving the East-West Pipeline got damaged in the drone attack, according to satellite imagery and industry sources.

The pipeline will resume crude supply to Aramco refineries located on the Red Sea coast, with one cargo already scheduled to load at Yanbu. As per some sources, the consignment will be dispatched for China.

Traders were also getting ⁠ready for Saudi oil loadings by moving tankers to Egypt’s Mediterranean Port Said for ship-to-ship transfers and also to Sidi Kerir.

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The Dangote Refinery IPO offers the general public a roughly 3% stake in the refinery. Dangote, Africa’s richest man, has described the offering as a “people’s IPO,” saying the move was intended to give ordinary Nigerians an opportunity to participate in the plant’s success.

However, the refinery’s private placement in July required institutional investors to pay a lower valuation than retail investors.

Back then, the placement raised USD 2.5 billion for a 6% stake, valuing the refinery at around USD 40 billion.

If everything goes as per Dangote’s plans, the refinery’s IPO may end up valuing the company closer to USD 49 billion.

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Saudi Arabia has temporarily shut its East-West pipeline following drone attacks on the vital crude conduit, which has become a critical alternative export route amid the war-related disruption in the Strait of Hormuz. The closure threatens to deepen the global oil supply squeeze and push prices higher if repairs take longer than expected.

The 1,200-kilometer pipeline, also known as Petroline, transports crude from Saudi Arabia’s oilfields in the east to the Red Sea port of Yanbu. It has been moving between 4 million and 5 million barrels per day recently, equivalent to roughly 4-5% of global oil supply, according to ship-tracking companies and analysts cited by Reuters.

Alternative route under threat
The pipeline’s importance has grown sharply since tanker traffic through the Strait of Hormuz slowed to a trickle amid the conflict between the US and Iran. By moving crude across the Arabian Peninsula to Yanbu, Saudi Arabia has been able to bypass the congested Gulf shipping route and maintain access to markets west of the Kingdom.

The latest attack threatens that workaround. Saudi Arabia’s Energy Ministry said the pipeline had been stopped as a precaution after the strikes, which caused injuries and material damage. Satellite imagery showed smoke rising from an area along the pipeline south of Medina.

The attacks took place in Saudi Arabia’s Riyadh and Medina regions. Riyadh and Baghdad said the drones originated in Iraq, where Iran-backed militias operate. No group had immediately claimed responsibility, while Iraq launched an investigation and dismissed a military commander linked to operations in Maysan province, near the Iranian border.

Saudi Arabia has so far held back from retaliation at Baghdad’s request, giving the Iraqi government time to investigate and prevent further attacks from its territory. The episode nevertheless highlights the growing vulnerability of the kingdom’s energy infrastructure as the regional conflict widens.

Stocks offer only limited relief.
The immediate concern for oil traders is not simply the volume of crude that the pipeline can carry, but how long Saudi Arabia can sustain exports while the alternative route remains unavailable.

According to Reuters, existing stocks at Yanbu could be depleted within five to seven days if the pipeline remains offline. Egypt’s Ain Sukhna and Sidi Kerir ports provide some relief with additional supplies, but the available volumes remain limited.

The narrow stock cushion means the duration of the outage will be critical. Inventories and alternative logistics can absorb a brief interruption.

A prolonged shutdown, however, would increase the risk of actual supply losses, potentially tightening the market further at a time when buyers are already competing for fewer available barrels.

Saudi oil production has also been under pressure. Reuters reported that output had fallen from 10.9 million barrels per day in February to 6.2 million bpd in August, its lowest level in more than three decades. The International Energy Agency has forecast a global oil supply decline of 5.7 million bpd, or 6%, this year.

The Red Sea adds to energy risk
The pipeline shutdown comes as Iran-aligned Houthi forces in Yemen tighten their grip on Red Sea shipping.

The Houthis have seized Perim, also known as Mayun Island, at the mouth of the Bab el-Mandeb Strait, according to Yemeni government sources cited by Reuters. The strategic waterway connects the Red Sea with the Gulf of Aden and is an important route for oil tankers travelling between the Middle East and Europe.

The development creates a double challenge for Saudi Arabia. Its East-West pipeline had offered a way around Hormuz, but the Red Sea route itself is now becoming more dangerous. MarketWatch reported that oil shipments through Bab el-Mandeb had ceased, while Saudi Arabia was attempting to reroute exports through Egypt’s Sidi Kerir port, a more costly and time-consuming option.

The combination of a blocked or severely disrupted Hormuz route, a threatened Red Sea corridor, and damage to Saudi Arabia’s principal east-west crude pipeline leaves fewer reliable options for moving oil to international customers.

Prices and inflation in focus
Oil markets have already reacted to the worsening supply outlook. Brent crude has risen above $100 a barrel, while diesel prices in the US have reached record levels, according to Reuters and the Financial Times. The disruption is also raising concerns over inflation, particularly as higher transport and energy costs feed into consumer prices.

For the GCC, the crisis presents a difficult balance between protecting critical energy infrastructure and preventing further escalation. Saudi Arabia has asked Washington for military assistance against the Houthis, while the United States faces pressure over the economic impact of rising fuel prices.

The pipeline outage is therefore more than a temporary operational setback. It is a test of Saudi Arabia’s ability to maintain crude exports under sustained geopolitical pressure and a warning to global oil markets that the loss of a single alternative route can have consequences far beyond the Arabian Peninsula.

For traders, refiners, and governments, the next few days will hinge on the speed of repairs, the availability of alternative export routes, and whether attacks on regional energy infrastructure continue. Until those questions are answered, the threat of a supply shock remains firmly in focus.

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The production expansion programme, due to be completed by 2029, would increase the refinery’s capacity to 1.4 million barrels per day from 700,000 currently, according to the prospectus for its IPO on Nigeria’s main stock exchange.

The venture aims to raise about 2.15 trillion naira (USD 1.63 billion) through the IPO, primarily targeting retail investors. While the listing-related preparations will run from September 14 to October 13, the shares may start trading in late November, according to an indicative listing timetable.

The Nigerian SEC (Securities and Exchange Commission) has already registered the refinery company’s existing 120.13 billion ordinary shares, implying a valuation of around USD 47 billion.

The refinery, which began operations in 2024, is part of the growing business empire of Aliko Dangote, Africa’s richest man. The conglomerate also includes cement and sugar assets.

Built at a cost of about USD 20 billion on the outskirts of Lagos, the refinery has reshaped Nigeria’s fuel market. The facility came into media headlines during the Iran war by emerging as a viable non-Gulf alternative source for Africa and Europe in terms of importing jet fuel.

During Monday’s event, Aliko Dangote said that while the refinery had profited from the conflicts in the Middle East and Ukraine, his conglomerate eyes making the energy business ‌sustainable ⁠over the long term.

As per the African business tycoon, UAE’s state energy giant ADNOC was interested in investing in the plant alongside others.

Among the other details mentioned in the IPO prospectus, the refinery made an after-tax profit of USD 1.82 billion in the first half of 2026, compared with ⁠a USD 476 million loss for all of 2025.

Dangote refinery will be initially offering 4.1 billion ordinary shares at 525 naira each. However, the business possesses a “greenshoe option” whereby it could sell up to 30% more if demand exceeds that amount.

“The intent is very much the people’s IPO, ⁠drive wide participation, enable Nigerians and the Nigerian diaspora, and Africans more broadly, and the opportunity to participate in this wealth creation that comes from such an iconic industrial asset, like the Dangote refinery,” David Bird, chief executive of ⁠the refinery, told Reuters.

Aliko Dangote, with a net worth estimated at up to USD 35 billion, also plans to build a refinery on Kenya’s coast in partnership with East African governments.

Talking about the IPO-bound refinery, a private placement in July indicated a valuation of USD 40 billion for the infrastructure. However, some investors and analysts described the ratio as being highly relative when compared to other listed stand-alone oil refiners.

For example, Turkey’s Tupras, ⁠which has a Dangote-like refining capacity spread across four sites, has a market value of about USD 12 billion, while New York-listed HF Sinclair, with a capacity of roughly 678,000 bpd, is valued at about USD 16 billion.

Dangote previously declared his intention of transforming the refinery into one of Africa’s largest companies, generating more than USD 12 billion in earnings before interest, tax, depreciation and amortization (EBITDA).

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Funding, for now, is not the binding constraint. Costs could run into hundreds of billions of dollars over coming years, and Gulf sovereign wealth funds, among the biggest in the world, are already stepping in to accelerate the push, while some governments may also court external capital as international infrastructure funds circle the region’s assets.

Zin Bekkali, chief executive of UK-based Silk Invest, argues Gulf governments have the capital to fund most of this internally, and that infrastructure is clearly set to benefit.

The bill for six months of war
The spending is happening against a badly deteriorating macro backdrop, which is precisely why it counts as strategy rather than stimulus.

Qatar and Kuwait’s economies are expected to contract by just over 8% this year, according to a Reuters poll, while Saudi Arabia is forecast to grow only 1.4% after 4.5% in 2025. Qatar, among the world’s top LNG exporters before the war, depends entirely on the strait to ship gas and is also dealing with severe production shortfalls after damage to its energy facilities.

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The regulator has cited the Iran war pushing up wholesale energy costs while justifying the move.

The rise, according to analysts, will undermine Burnham’s pledge to alleviate the United Kingdom’s cost-of-living pressures. The Ofgem announcement is also going to wipe out the benefits of the measures the new British PM announced last month, in which the tax got cut on electricity bills.

“High international gas prices are continuing to drive energy costs in the UK. We ⁠welcome the government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter,” said Neil Kenward, Ofgem’s director general for markets.

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The ‌refinery has submitted an application for a USD 5 billion IPO to Nigeria’s Securities and Exchange Commission, as per the reports. The final size of the listing, however, is not decided yet.

“We really want to drive participation. The mandate of the IPO was to be the people’s IPO,” CEO David Bird told Reuters.

As per Bird, the African energy giant wanted at least three years of ⁠proven production and financial performance before pursuing an overseas listing, which could support a stronger valuation. London has been mentioned as a possible venue.

While Bird didn’t say anything about the IPO’s size or the refinery’s valuation, reports suggest that the company could take into account the USD 2.5 billion raised in a July private placement, which valued the refinery at about USD 40 billion.

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