Middle East crude exports have risen strongly, but oil product markets remain very tight
Crude oil exports from the Gulf surged in September, reaching over 75% of pre-war levels as producers, led by Saudi Arabia, made greater use of ship-to-ship transfers and routes bypassing the Strait of Hormuz. However, an increase in Iranian attacks on ships transiting the Strait – alongside Houthi attacks on energy infrastructure in the region – has cast considerable uncertainty over the outlook for exports from the Gulf, according to the IEA's latest Oil Market Report.
Meanwhile, markets for refined oil products remain extremely tight. While global diesel prices have eased from all-time highs reached in September, benchmark prices have recently been trading close to double their pre-crisis levels and those of crude oil. This is raising the cost of goods around the world and impacting real incomes, economic activity and inflation. The IEA's latest report forecasts that the tightness in diesel markets will continue into 2027.
The cost of shipping oil from production and refining hubs to the markets where it is consumed has also soared amid the war in the Middle East. By mid-October, the cost of shipping crude from the Gulf to Asia on a large tanker had reached more than five times its level before the war began. The IEA's new commentary looks at how the surge in the cost of shipping has lifted oil prices for consumers.
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