Oil Exports from the Middle East are almost at pre-war levels

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Oil supplies from the Middle East have almost recovered to pre-war levels, but the global fuel shortage remains severe because crude oil exports have rebounded faster than refined products such as diesel and gasoline. Daily oil supplies from the region reached around 92% of pre-war levels in the final week of September 2026.

This recovery has been facilitated by US military escorts for tankers, ship-to-ship transfers that allow oil to be moved between vessels, and pipelines that bypass the Strait of Hormuz and transport oil towards the Red Sea and Gulf of Oman. Around 40% of the region’s oil exports bypassed Hormuz in September, compared with 17% before the war.

However, the recovery in crude shipments has not translated into a comparable recovery in fuel availability. A seven-day average of 10.3 million barrels of crude oil per day was passing through Hormuz, equivalent to 76% of pre-war levels, while refined petroleum products were flowing at only 1.3 million barrels per day, around 11% of total shipments. Before the war, refined products accounted for more than 20% of cargoes.

The main bottleneck is damage and disruption to refineries in Saudi Arabia, Kuwait, the United Arab Emirates, Iraq and other regional producers following missile strikes and other wartime damage. The shortage has pushed US diesel prices to a record $6.53 per gallon in late September, reaching $8.44 in California. In response, the United States temporarily allowed dyed diesel to be used on highways, effectively deferring a 24.4-cent-per-gallon tax, while G7 countries agreed to release 100 million barrels from emergency reserves but declined to restrict diesel exports.

US oil executives have argued that naval escorts should prioritise tankers carrying refined fuels rather than crude oil, as most escorted vessels so far have been very large crude carriers. Despite the improvement in export volumes, the recovery remains fragile because Iranian attacks could disrupt shipping again, while damaged refineries may take considerable time to return to operation. A full recovery in fuel supplies may not occur until well into 2027.

Alternative routes and naval protection can help crude oil reach international markets, but refineries must also be operational to convert it into the diesel and gasoline that economies actually consume.