US operation to smuggle oil from Gulf unlikely to alleviate ‘underlying risks’, analysts say

Despite reports that the United States is attempting to move oil out of the Gulf through the Strait of Hormuz in an effort to circumvent restrictions imposed during the US-Israel war with Iran, analysts have told The New Arab that any such operation is unlikely to reduce the fundamental risks facing energy shipments from the region.

Washington has reportedly been conducting a secret operation for several weeks to move up to 10 million barrels of oil per day, roughly half of pre-war export levels, out of the Gulf, according to an Axios report published on Wednesday.

Citing two US officials, the report said that between 15 and 20 tankers a day had been transiting to and from the strait through a southern channel along Oman’s coast.

However, Neil Quilliam, an associate fellow with Chatham House’s Middle East and North Africa Programme specialising in energy policy and geopolitics, said the reported operation was not a sustainable solution to the disruption in the Gulf.

"The operation itself does not surprise me, but I see it as a short-term workaround that allows Trump to claim greater control over the Strait," Quilliam told The New Arab. "The underlying risk has not changed."

He said the operation "was not sustainable and already comes with significant risk", pointing to a June incident in which a US Apache helicopter was reportedly downed by an Iranian drone while supporting earlier efforts to move oil through the Gulf.

The episode triggered a fresh round of clashes between US and Iranian forces, reflecting a pattern of recurrent escalation since the Memorandum of Understanding that ended the full-scale war in June.

"While Iran’s surveillance and coastal monitoring capabilities have been degraded by US military action, it retains the ability to launch drones and other strikes against vessels, which we have seen in recent weeks," Quilliam said.

Without US facilitation, support vessels and broader logistical backing, commercial operators would be unlikely to undertake such transits independently, Quilliam added.

"As a result, this remains a costly and high-risk enterprise that is likely to become a prime target for Iran," he said.

Difficult to verify

The report, which also said the US operation was being coordinated with Gulf states, is difficult to independently verify, according to the analysts who spoke to The New Arab.

Hamish Kinnear, principal Middle East and North Africa analyst at risk intelligence company Verisk Maplecroft, said verification was complicated by tankers switching off their transponders while moving through the strait.

"There is a delay to the satellite imagery and ship chartering data that can be used to reconcile reported volumes against actual volumes," Kinnear told The New Arab.

Quilliam similarly said the lack of vessel-tracking data made firm assessments of the scale of the operation difficult.

"Given that many of the tankers traverse the straits with their transponders off, it is very difficult to provide accurate figures for the numbers of vessels, and therefore the volumes of crude, that have exited this way," he said.

Pressure on prices

The Strait of Hormuz, through which around one-fifth of global oil consumption normally passes, has been a central point of contention in negotiations between Washington and Tehran. The near-total disruption to shipping has pushed global oil prices sharply higher, from around $60 per barrel before the war to a peak of roughly $118.

Although prices have since fluctuated, a barrel of oil was trading at around $93 on Friday, placing renewed pressure on the Trump administration, which has repeatedly pledged to bring down costs for US consumers.

Kinnear said market pricing suggested traders had already accounted for at least some successful "dark" transits through the waterway.

"For now, the industry consensus is the oil price, which is creeping up despite these new claims," he said. "The fact that benchmark prices are still below USD100 per barrel in part reflects the baked-in price impact of successful dark transits."

If US claims that traffic through the strait has increased prove accurate, Kinnear said this could strengthen Washington’s hand in negotiations with Tehran.

"That doesn’t necessarily make a deal more likely, as Tehran may seek to escalate in other ways to re-establish its negotiating position — by once again targeting energy infrastructure in the Persian Gulf, for example," he added.

Quilliam said the operation should not be viewed solely as an attempt by Washington to influence oil prices. Gulf governments also had a clear interest in maintaining exports through the strait, he said.

"The US has always had an interest in ensuring oil prices sit within a reasonable range, and the price at the pump is, of course, a critical concern domestically, given the upcoming midterm elections," Quilliam said.

"However, an operation like this would obviously be coordinated with Gulf allies, who have their own important reasons to want oil to continue moving out of the strait. So, I would not characterise this as a US attempt to manipulate the market, but rather a response to pressure on oil prices, the result of which benefits both Trump domestically and Gulf allies’ budgets."