Middle East crude oil exports restored to 98% of pre-war levels! JPMorgan report reveals "oil shortage trade" cooling down, but energy inflation remains persistent

According to English Finance APP, the latest crude oil flow analysis and research report released by Wall Street financial giant J.P. Morgan shows that despite the continued shipping risks in the Strait of Hormuz and Bab-el-Mandeb, the volume of Middle East crude oil transportation has almost recovered to pre-war levels.

Recently, U.S. officials have repeatedly noted that the volume of crude oil transported through the Strait of Hormuz has increased, although investors’ consensus estimates are more conservative. Earlier this month, U.S. Treasury Secretary Scott Bessent stated that about 17 million barrels of oil pass through this route daily, while TotalEnergies SE CEO Patrick Pouyanne observed around 10 million barrels of crude oil and products exported each day.

Although Middle Eastern oil exports are demonstrating unexpectedly strong resilience, the energy supply chain, including refined products, has not yet returned to normal. J.P. Morgan’s estimates as of September 29 show that Middle East crude oil exports by sea have rebounded to 17.5 million barrels per day, accounting for 98% of pre-war levels; yet, the transportation of refined products such as diesel and gasoline has only recovered to 58% of pre-war levels, and the total volume of crude and refined product shipments has reached 89% of 2025 levels.

Export arteries are flowing again! J.P. Morgan: Middle East crude oil shipments reach 98% of pre-war level

The J.P. Morgan analyst team, including Natasha Kaneva, stated in a report on September 29: “The main arteries of Middle Eastern oil exports are flowing again.” They remarked that for a region still at war, this represents a “notable recovery,” even though the progress is not entirely even.

J.P. Morgan noted that crude oil shipping volumes have rebounded to 17.5 million barrels per day, representing 98% of pre-war levels, while refined products like diesel and gasoline are shipping at a rate of 3 million barrels daily, equivalent to 58% of pre-war levels. Based on the 10-day moving average over the past five days, total transportation volume is about 89% of the 2025 levels, the analysts said in the report.

As the U.S.-Iran conflict enters its eighth month, the global oil market is closely monitoring the quantity of crude and refined products exported from the region. Beyond goods transported through the Strait of Hormuz, Saudi Arabia has also managed to restore about half of the capacity of its east-west pipeline. This pipeline, which runs across Saudi Arabia and carries oil to its Red Sea ports, had been damaged earlier this month.

Analysts said the volume of oil moved through the Strait of Hormuz has nearly “recovered to almost 13 million barrels per day as of late June, mainly driven by Saudi Arabia.” “However, increased throughput should not be misinterpreted as an improvement in security conditions—it actually reflects the industry’s growing ability to operate amid persistent risk,” they explained.

The Strait of Hormuz links the Persian Gulf to the global market. As Iran claims control of this passage, the waters around the strait have seen repeated attacks on ships in recent months. The U.S. refused to recognize this claim and, while blocking Iranian ports, has helped vessels from other countries transit the strait.

J.P. Morgan estimates show that Middle Eastern crude oil export volumes have risen to 17.5 million barrels per day, the equivalent of 98% of pre-war levels; diesel, gasoline, and other refined product shipments have only recovered to 58% of pre-war levels, and the combined shipment volume of crude and refined products stands at 89% of 2025 levels. This latest data undoubtedly reveals a shift in the oil market: the increase in transit through the Strait of Hormuz and the reopening of Saudi alternative transportation channels are easing crude oil shortage pressures, but there remain significant gaps in refined product supply, transportation costs, and delivery security. “Being able to ship the oil out” and “being able to deliver it consistently, safely, and at low cost” still represent two different supply conditions.

Oil prices are also factoring in this divergence. As of 9:30 am Beijing time on September 30, front-month Brent crude oil futures rose 1.11% to $103.73 per barrel after Tuesday’s drop; compared to $72.48 per barrel on February 27, the last trading day before the war, this represents a rise of about 43.1%. However, there is a significant price spread between the expiring November contract and the more active December contract, with the latter settling at $96.16 on September 29. The higher near-end prices reflect ongoing scarcity in immediate delivery.

Diplomatic progress is not yet sufficient to eliminate this risk premium. On September 29, Qatar stated it is still conducting shuttle mediation to help the U.S. and Iran find common ground, with restoring freedom of navigation in the Strait of Hormuz as a priority; Trump has denied offering to relax sanctions or unfreeze Iranian funds in exchange for nuclear concessions. Negotiations are ongoing, but no arrangement yet guarantees the long-term normalization of commercial shipping, leaving oil prices influenced by both supply restoration and the risk of escalation.

One pipeline, two straits—the oil market is still paying a “delivery certainty premium”

The repair of Saudi Arabia’s east-west pipeline has reopened an important route for crude oil export, but it’s necessary to distinguish between pipeline capacity, actual throughput, and port loading volume. According to Reuters on September 29, the pipeline’s capacity is 7 million barrels per day, with actual throughput of about 5.5 million barrels per day before the attack. After resuming operations, industry insiders and Kpler estimate current throughput at about 2 million and 2.65 million barrels per day, respectively.

Kpler expects the figure could rise to 3–4 million barrels per day in coming days, but returning to pre-attack levels may still take about a month. Loading at Yanbu port has also resumed. Therefore, although resuming pipeline operations means transportation capacity is being released, it cannot be equated to a complete recovery of the 7 million barrels per day capacity, let alone an increase in oil production capacity.

From a transportation geography perspective, the east-west pipeline delivers crude oil to Yanbu on the Red Sea coast, helping Saudi Arabia avoid the Strait of Hormuz; after loading, ships can head north through the Suez Canal or SUMED pipeline to enter the Mediterranean, or head south via the Bab-el-Mandeb on usual routes to Asia. Bypassing Hormuz does not mean avoiding all energy transport and long-distance shipping risks. The current U.S. Maritime Administration advisory notes ongoing threats from Houthi forces to commercial vessels in the Red Sea and Bab-el-Mandeb, with ships linked to Saudi Arabia facing higher risks.

Such risks have led to tangible costs. According to media reports on September 24, quoting industry sources, the war risk premium for Saudi-linked tankers calling at Yanbu has risen to about 3% of the vessel’s value, compared to less than 1% at the start of July; this offers an insurance quote rather than a standardized fee for all ships. However, this allows for an investment perspective: crude oil/futures markets are no longer trading solely on “how many barrels are missing” but also on “whether these barrels can be reliably delivered.” The resumption of crude flows helps lower shortage premiums, but the lagging recovery of refined product shipping, coupled with high insurance and transport expenses, may continue to delay the fall in end-user energy inflation.