Gulf Oil Exports Briefly Hit Pre War Levels Before New Escalation

Oil prices are wobbling as tensions in the Persian Gulf flare again, and the United States Oil Fund (USO) reflects that unease, slipping 1.78% to 125.03 dollars. Gulf oil exports had briefly rebounded to levels not seen since before recent hostilities, but that recovery is already fading as shipping through the Strait of Hormuz thins out once more.

Key Takeaways

• USO trades at 125.03 dollars, down 1.78% on the day, within a 52 week range of 102.42 to 142.33.
• RSI sits at 52.35, a neutral reading that suggests no extreme overbought or oversold pressure yet.
• Crude and condensate exports from the Gulf rose to between 12 and 13.6 million barrels a day in early July, per Kpler and Vortexa data.
• The United States and Iran are both targeting vessels in the Strait of Hormuz, threatening a repeat blockade.
• Brent crude has climbed back above 90 dollars a barrel amid the renewed friction.

A Brief Rebound in Gulf Oil Exports

Shipments out of Saudi Arabia, the UAE, Iraq, Iran and Kuwait jumped 16% from June levels during the first two weeks of this month. Kpler put the daily average near 12 million barrels, while Vortexa's estimate ran higher, at 13.6 million barrels. Iraq, Iran and Saudi Arabia accounted for much of that gain, according to the two tracking firms, with Iraq singled out by Vortexa as the biggest driver of the increase.

That bounce, though, looks more like a pause between disruptions than a durable recovery. Tanker traffic through the Strait of Hormuz has already begun thinning again, a sign that the brief window of calm is closing.

Renewed Strikes Choke the Strait

Kpler analyst Johannes Rauball noted that slowing activity in the waterway will force producing nations to trim output simply because there is less capacity to move the crude. Bloomberg reported a tanker halting in the strait following an Iranian strike on vessels there, underscoring how quickly the security picture can shift.

The standoff now has two sides actively targeting ships. The United States is going after Iranian and Iran linked vessels, while Iran is striking ships tied to countries allied with Washington. Barclays analyst Amarpreet Singh said the coming weeks will show how much oil can realistically keep flowing out of the region under this kind of dual blockade.

Price Reaction Across Crude Benchmarks

Brent crude has pushed back above 90 dollars a barrel as the risk premium returns to the market. WTI was trading near 84.25 dollars a barrel at last check. USO's own move, down nearly 2% on the day even as geopolitical risk mounts, points to a market still weighing whether actual barrels will be lost or whether this remains a war of rhetoric and isolated strikes.

How Long Can the Export Slowdown Last?

The real question hanging over traders is whether Gulf producers can keep enough crude moving through Hormuz to avoid a genuine supply shock, or whether the dual blockade tightens further from here. Inventories, dollar strength and how far each side is willing to escalate will all factor into where USO and Brent head next. For now, the market is treating this as an unresolved standoff rather than a settled outcome.

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