Strait of Hormuz oil flows have recovered sharply from the disruption that followed the start of the US-Iran war, but the return of barrels has not restored normal conditions for global energy markets or India’s refiners. Tanker-tracking data cited by the Times of India shows that shipments have increased even as attacks, insurance costs, freight rates and depleted inventories continue to keep crude prices elevated.
The distinction between oil being available and oil being reliably deliverable is at the centre of the current crisis. September data from Kpler showed Middle East oil flows recovering to an average of 16 million barrels per day, the highest level since the conflict began. Around 10 million barrels per day moved through the Strait of Hormuz, while another 6 million barrels per day travelled through pipelines and ports on the Red Sea and Gulf of Oman that bypass the waterway.
That recovery has reduced the immediate physical shortage, but it has not removed the risks embedded in the supply chain. The Strait of Hormuz remains a critical passage for Gulf energy exports, and the latest data suggests that its operational recovery is uneven rather than complete. For India, which depends heavily on Middle Eastern crude as well as LPG and LNG imports, that distinction affects procurement costs, refinery planning and the wider economy.
The reported numbers also show why a headline recovery in shipments can conceal a fragile system. Gulf crude exports rose to 14.1 million barrels per day in September from 9.8 million barrels per day in August, according to Naveen Das, senior analyst at Kpler. That was about 78% of February’s 18.2 million barrels per day, although the figure included bypass loadings at Yanbu and Fujairah.
Kpler’s crossing data showed crude transported through the strait was down 27% from a wartime high, to at least 10.1 million barrels per day. Das told the Times of India that laden exits fell from about 11 million barrels per day between October 1 and 7 to 6.2 million barrels per day between October 8 and 12. The figures indicate that flows can recover quickly when operators adapt, but can also weaken when security conditions deteriorate.
This is why the recovery cannot be read simply as evidence that Iran has lost its leverage over the waterway. Kpler’s assessment, as cited in the report, is that normalisation may continue without a new US-Iran agreement, through slower and uneven operational adaptation under continuing conflict. The United States appears willing to maintain economic pressure while facilitating shipping, according to the company’s analysis.
The available evidence points to a change in the form of leverage rather than its disappearance. Iran’s ability to halt every barrel moving through Hormuz may have weakened as tankers, governments and military forces developed ways to keep trade moving. But the cost of maintaining that movement has risen sharply, and those costs are being transmitted through the energy system.
Very large crude carriers loading at Fujairah, Yanbu or Muscat were reportedly fixing at 750-950 Worldscale points, compared with 125-155 for Gulf loadings in February. War-risk premiums rose to 3-8% of a vessel’s hull value, against approximately 0.25% before the conflict. The New York Times analysis cited by the report attributed the increased traffic partly to US military air protection and higher payments by Saudi Arabia and the United Arab Emirates to tanker operators.
These are not marginal costs. They alter the economics of every cargo and make the reliability of a shipment as important as its nominal price. A tanker that loads crude but faces a high probability of delay, attack, rerouting or expensive insurance cannot be treated by refiners as equivalent to a cargo moving through a stable corridor.
The security threat also remains active. The report says Iran continued to attack ships almost daily, while the week before publication saw the highest number of tanker attacks of the war, according to Kpler data. Only seven commodity vessels crossed the strait on October 6, compared with about 125 a day before the conflict. At least six vessels were hit after September 28, and Saudi Arabia’s East-West pipeline, damaged in attacks on September 10 and 11, was only about half restored.
The wider geography of risk matters as well. Iran retains potential influence through other routes and infrastructure. Its allies, the Houthis in Yemen, control the Bab al-Mandab Strait, another important shipping passage, while Gulf energy infrastructure remains exposed to attack. The result is a network-level vulnerability: reducing dependence on one route does not automatically eliminate the strategic risk if other corridors or facilities can be disrupted.
The persistence of high crude prices reflects this risk structure. Supply volumes have improved, but the market is not pricing only the number of barrels loaded or observed at sea. It is pricing the reliability and usability of those barrels. Das said that unsustainable flows, the threat of attacks and the need to secure crude before freight rates reduce refinery margins were keeping prices elevated.
The cost of moving oil has become a particularly important part of the story. Praveen Rai, director at Grant Thornton Bharat, said industry shipping estimates showed Middle East-to-Asia very large crude carrier rates exceeding $1.2 million per day, compared with roughly $30,000 in January. Freight represented about 27% of the delivered value of a barrel on the observed route, against approximately 3% previously.
This changes how supply recovery reaches consumers and industries. Even if additional crude becomes available, higher freight and insurance charges can prevent a comparable reduction in landed costs. Refiners must also account for delays, risk allocation, ship-to-ship transfers and the specific commercial terms attached to each cargo. A supply chain can therefore be technically functioning while remaining economically stressed.
The inventory position adds another layer. The report cites International Energy Agency data showing that global diesel exports in September were approximately 700,000 barrels per day below the previous year. A 1.3 million barrel-per-day loss from Russia and the Middle East had been only partly offset by other suppliers. Global observed oil inventories were also 509 million barrels below end-February levels.
That shortage of buffers makes the market more sensitive to every new disruption. Inventories normally provide time for buyers and refiners to absorb a temporary interruption. When stocks are depleted, even a partial fall in shipments can increase competition for available cargoes. The approach of winter, which is expected to increase demand for heating fuel, adds to that pressure.
Crude availability alone is also insufficient to guarantee adequate fuel supply. Rai pointed to crude quality and refinery availability as additional constraints. More exports do not automatically produce more diesel, especially when medium-sour grades and refinery capacity are constrained. The relationship between crude flows and retail energy conditions therefore depends on the type of crude, the facilities able to process it and the products demanded by different markets.
For India, the adjustment has involved flexibility rather than a complete escape from Gulf exposure. The country kept total imports at about 5.0-5.3 million barrels per day while shifting origins according to the lowest risk-adjusted landed cost, Das said. Russia’s share rose from 1.08 million barrels per day in February to a peak of 2.73 million barrels per day in July before easing to 1.87 million barrels per day in September.
The Gulf-origin share fell from about 59% in February to approximately 18% in June and recovered to around 37% in September. Imports from Iraq and Kuwait rose from 0.32 million barrels per day in August to 0.86 million barrels per day in September. Venezuela also emerged as a new supplier, contributing between 0.2 million and 0.35 million barrels per day since April, according to the report.
This wider crude basket has given Indian refiners more options, but it has not removed route risk. Several Gulf suppliers still depend on the same chokepoint, meaning supplier diversification is not the same as geographic or logistical diversification. India may buy from more countries while remaining exposed to a common maritime vulnerability.
The improved availability of Gulf crude is nevertheless significant for refinery operations. Rai said Indian refiners had gained greater access to medium-sour grades suited to producing diesel and other middle distillates. Supplier-arranged shuttle movements and ship-to-ship transfers can reduce a buyer’s direct exposure to the riskiest part of a voyage, although the allocation of freight, insurance and transit risk depends on the terms of each cargo.
For the urban economy, the implications extend beyond petrol and diesel prices. India’s dependence on the Middle East also includes LPG and LNG, which connect maritime security to household cooking fuel, commercial activity, electricity generation and industrial operations. Higher procurement and logistics costs can feed into transport, manufacturing and other sectors even when crude shipments are technically continuing.
The evidence therefore supports a more precise conclusion than either a full supply-crisis narrative or a simple return-to-normal story. Strait of Hormuz oil flows have recovered from their lowest levels, and operators have demonstrated that trade can be rerouted, escorted or commercially supported. But the system remains dependent on expensive risk management, limited inventories, vulnerable infrastructure and uncertain security conditions.
For India, the immediate strategy remains optionality: retain access to multiple suppliers, compare risk-adjusted landed costs and use refinery flexibility where possible. That approach can reduce exposure to any single source, but the figures cited by Kpler and Grant Thornton show that it cannot fully insulate the country from a shared maritime chokepoint. Durable price relief would require safer passage, lower freight and insurance costs, improved refinery operations and the rebuilding of inventories, alongside higher supply.
