Gulf oil exports surge despite US-Iran war

Gulf crude and condensate exports from Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran rose about 16% from June's daily average to 12 million barrels per day in the first half of July, the highest since before the Iran war began in late February, according to Kpler data. Vortexa estimated exports at 13.06 million bpd. The increase followed a temporary US-Iran interim deal in mid-June to reopen the Strait of Hormuz, which unravelled in early July over disagreements about the waterway's administration. Shipments through the strait are already declining as strikes by both sides re-escalated, dropping to just three commodity tankers on Thursday, the fewest daily transits since May. Even after the rebound, exports remained about 32% below February's pre-war peak of 17.6 million bpd. Iran has instructed Yemen's Houthis to be prepared to disrupt Red Sea traffic if the US targets Iranian energy infrastructure, sources told Reuters. Saudi Arabia has diverted most of its energy exports through its Red Sea port of Yanbu, with 75% of its 5.29 million bpd exported from Yanbu in July. Oil prices fell on Friday but remained on track for a roughly 20% monthly gain, with Brent down 1.2% to $88 a barrel and WTI down 1.8% to $82.09. Higher security risks have boosted freight costs and insurance premiums, embedding a significant geopolitical risk premium in oil prices.