Overview
- Military exchanges in the Gulf have driven wild price moves this week, with oil jumping more than $3 per barrel after U.S. and Saudi strikes in Iraq and reported interception of Iranian‑launched missiles.
- Ukraine’s foreign intelligence service says bypass flows have risen from about 3.5 million barrels per day to roughly 6.5 million bpd and that engineers plan to add about 1.2 million bpd by 2027, taking bypass capacity to roughly 8 million bpd.
- Two routes are carrying the extra load: Saudi Arabia’s East–West pipeline from Abqaiq to Yanbu and growing UAE exports through Fujairah, both undergoing upgrades and expanded use to avoid Hormuz transit.
- Shipping and market data show transit through the Strait of Hormuz has plunged, with Barclays reporting net exports through the strait falling roughly from 5.9 million bpd to 2.9 million bpd week‑on‑week.
- The new routing and rising non‑Russian supply, combined with OPEC+ quota moves, are expected to push Urals prices lower and squeeze Moscow’s oil revenues while leaving markets sensitive to short‑term security shocks.