How Middle Eastern oil producers flipped the script on Iran

Key Points:

• The Greek-owned supertanker Kiku recently employed a "dark transit" tactic by switching off its AIS transponder to avoid Iranian drone attacks while crossing the Strait of Hormuz, a strategy now used by Middle Eastern oil producers with US military escort.
• This clandestine method involves tankers turning off tracking devices and transferring oil ship-to-ship in the Gulf of Oman, shifting the risk of Iranian attacks from commercial shippers to the US government and oil producers themselves.
• The tactic has enabled continued oil flow through the Strait of Hormuz, with the US Department of Energy reporting 8-9 million barrels per day, roughly double estimates based on transponder data, helping to mitigate supply disruptions caused by the ongoing Middle East conflicts.
• Despite its effectiveness, the dark transit strategy is costly, risky, and temporary, as global oil inventories have been significantly depleted and refining capacity is strained, particularly for fuel products like diesel and jet fuel.
• The prolonged conflict and control struggles over the Strait of Hormuz have kept oil prices high, near $100 a barrel, contributing to inflation and economic pressure on consumers, while the market's adaptability has prevented even more extreme price spikes.