Oil producers bypass Hormuz with ship-to-ship transfers and dark transits

The ship-to-ship workaround represents a notable shift on the supply side of the oil story, as it indicates exporters have identified a method to keep barrels flowing without fully addressing the underlying Hormuz risk, which helps account for crude prices staying steady even as assaults on vessels continue. Goldman's interpretation — that the adjustment implies markets are factoring in disruptions lasting into 2027 rather than an early resolution — may carry more weight than the immediate flow figures themselves, as it points to the current elevated price range being seen as a sustained new normal rather than a fleeting risk premium. Refining margins hitting record levels is the next factor to monitor: if the choke point has genuinely moved downstream to refining capacity rather than crude supply, that carries different consequences for consumer fuel prices and inflation than a simple crude supply narrative would.

Producers in the Middle East are stealthily countering Iran's threats around Hormuz, and it is this workaround, not a settlement, that is holding oil markets steady.

• Ship-to-ship transfers — in which shuttle tankers owned by Gulf state oil companies move crude across the most dangerous part of the Strait of Hormuz before transferring it to waiting buyer vessels in the Gulf of Oman — have accelerated in recent days.
• Kpler has started including these transfers in its flow data, raising its unofficial estimate of Persian Gulf oil flows to as high as 15 million barrels per day in mid-August.
• Goldman Sachs, using a combined methodology, places Gulf exports of oil and products at roughly 15 to 16 million barrels per day, around 7 to 8 million barrels per day below pre-war levels but 5 to 6 million above the March low.
• Goldman analysts stated that the adaptation by shippers shows markets are pricing in interruptions lasting well into 2027, alongside ongoing "dark" transits in which vessels turn off tracking signals to avoid detection.
• US Energy Secretary Chris Wright said the US military helped move more than 15 million barrels of oil and products out of the strait, with total regional exports, including pipelines, near 20 million barrels, and a seven-day average strait flow exceeding 8 million barrels per day.
• Clashes intensified around the Strait of Hormuz over the weekend, pushing WTI and Brent futures up nearly 3% on Monday despite a Venezuela oil supply deal announced late Friday; Brent rose about 3% for the month and WTI about 1.4%, while refining margins have hit records as the supply bottleneck shifts downstream.

Middle Eastern oil producers are devising ever more inventive methods to get crude to market despite ongoing Iranian threats and attacks in the Strait of Hormuz. Ship-to-ship transfers have emerged as a key workaround that has helped keep crude futures stable even as the broader conflict shows no signs of abating, according to a Dow Jones Market Watch report.

The system operates akin to a relay. Shuttle tankers owned by Middle Eastern state-controlled oil companies transport crude from the Persian Gulf across the most hazardous part of the strait and into the Gulf of Oman — a burden that state oil companies are now more prepared to accept. At that point, tankers representing buyers, many of them Asian refiners still reluctant to traverse the strait directly, pick up the cargo via ship-to-ship transfers before proceeding to their destinations, paying an extra fee for the service. Commodity analytics firm Kpler has started integrating these transfers into its flow estimates, raising its unofficial reading of Persian Gulf oil flows to as high as 15 million barrels per day in mid-August. Goldman Sachs, combining Kpler's data with other sources and its own computations, arrived at a slightly higher figure of roughly 15 to 16 million barrels per day for oil and products together, a level still around 7 to 8 million barrels per day below pre-war levels but 5 to 6 million barrels above the March low.

Goldman analysts described the adaptation as proof that shippers and producers are now factoring in disruptions lasting well into 2027, rather than betting on a quick resolution. Alongside the ship-to-ship transfers, so-called dark transits — where vessels disable their tracking signals to move through the strait unnoticed — continue to hinder efforts to measure actual flows, with satellite imagery that could otherwise confirm volumes frequently delayed or unavailable. US Energy Secretary Chris Wright said American naval support had assisted in moving more than 15 million barrels of oil and products out of the strait, placing total regional exports, together with pipeline flows, near 20 million barrels, with a seven-day average of more than 8 million barrels per day leaving the strait itself. Unnamed US officials have separately told Axios that Iran has lost much of its command over the waterway, with the US military effectively controlling most of it.

Despite the improving flow picture, fighting erupted around the strait over the weekend, pushing both WTI and Brent futures up nearly 3% in Monday's trading session, even though a Venezuelan oil supply deal announced late Friday provided some offsetting relief. For the month, Brent gained roughly 3% and WTI around 1.4%, with Brent's larger increase reflecting its typically greater sensitivity to geopolitical events. Markets have relied on a mix of demand destruction, especially among Asian buyers that were previously the top importers of Middle Eastern crude and products, and alternative sourcing from countries such as the United States, to cope without full Hormuz flows. Analysts say the more critical choke point has now moved downstream to refining, where margins for making fuels like gasoline, heating oil and diesel have hit record levels in recent weeks. The administration is also banking on its Venezuela deal to ease pressure at the pump, with US oil executives scheduled to return to the White House on Tuesday to meet President Trump on reducing gasoline prices.