(PERSIAN GULF) – Global oil transport patterns are shifting rapidly, reducing the market power of Russian crude exports. New bypass routes around the Strait of Hormuz are being expanded, adding structural pressure to the price of Russia’s Urals blend.
Daily volumes of oil moved through alternative corridors have climbed from roughly 3.5 million barrels to 6.5 million barrels, according to an assessment released by Ukraine’s Foreign Intelligence Service. The total flow passing through the Strait of Hormuz stands at about 15 million barrels per day, meaning the rerouted share is growing significantly.
Two corridors are receiving the most investment and attention. The first is Saudi Arabia’s East-West pipeline, built in the 1980s, which carries crude from the Abqaiq complex to the Red Sea port of Yanbu. The second is the expanding stream of United Arab Emirates crude passing through the port of Fujairah, located on the Gulf of Oman roughly 145 kilometres south of the strait. Engineering plans target an additional 1.2 million barrels per day of capacity across these routes by 2027, which would raise total bypass volumes to 8 million barrels per day.
The intelligence report notes that the daily premium linked to Persian Gulf instability is gradually being removed from global oil prices. At the same time, a series of supply side developments is pushing prices lower. Higher Venezuelan output, increased OPEC+ quotas and the departure of the UAE from OPEC are all expected to weigh on energy markets.
These changes hit Russian Urals crude especially hard, the report states, because the grade carries additional discounts linked to sanctions risk, unreliable supply chains and opaque trading arrangements. As the global benchmark softens, Urals is forecast to fall faster and further.
Budget calculations from Moscow are already being revised. The assessment suggests that an earlier estimate of a 2 trillion rouble shortfall in state revenues from oil and gas this year, equivalent to about 21.9 billion US dollars or roughly 17.1 billion British pounds, will soon look too optimistic. Losses and revenue gaps for the state treasury are set only to widen, the intelligence service concluded.
In a related development, the largest Russian oil port on the Black Sea, Sheskharis, has halted tanker loadings for several days following Ukrainian drone strikes in the area.