A Russian anti-war young woman helps Ukraine eliminate traitors; Special topic: How much oil can Middle Eastern oil-producing countries export recently?

【Answer 1】【1.1】A reader asked: Teacher Xiao Kao, now that oil produced by Gulf countries cannot be shipped out via the Strait of Hormuz, is it all being stored—or has production been cut? Answer: This is an extremely important question, and I’m happy to answer it in detail. In short, Gulf countries have cut production by no more than 40%, and most of the oil they produce is exported globally via pipelines. Below is a detailed, module-by-module explanation: 1. Production cuts are definite—but capped at under 40%. In the early phase of the conflict (March–May), Gulf countries’ oil output suffered sharp, involuntary reductions. At that time, shipping volumes through the Strait plummeted by 90% compared with pre-conflict levels; vast quantities of crude oil could not be exported, causing onshore storage tanks to fill rapidly—forcing Gulf producers to slash output significantly. OPEC+’s overall daily output fell from roughly 42.77 million barrels in February to about 33.13 million barrels in May. Gulf oil producers led this cutback: alone, Gulf states reduced output by over 1.2 million barrels per day in May. From June onward, output gradually rebounded—but remained below pre-conflict levels. As alternative pipelines operated at full capacity and some maritime routes resumed passage, production continued recovering. In July, output rose further. According to Reuters’ market-tracking data, Gulf countries’ crude exports remained markedly lower than pre-conflict levels—down roughly 40%—but had not ceased entirely. In August, seven countries—including Saudi Arabia, Russia, and Iraq—announced a collective increase in daily production quotas by 188,000 barrels. Yet overall output still hadn’t returned to pre-conflict levels. The U.S. Energy Information Administration (EIA) forecasts that, through year-end 2027, the daily supply shortfall attributable to the Strait of Hormuz will remain around 600,000 barrels. 2. Where does the oil *not* cut go? It’s exported primarily via pre-established trans-peninsular pipelines + alternative ports—completely bypassing the Strait of Hormuz. Saudi Arabia: Uses the East–West Pipeline to transport oil to Yanbu Port on the Red Sea for onward shipment. This pipeline stretches over 1,200 km, with a full-capacity throughput of ~7 million barrels per day—of which ~5 million barrels per day can be directly exported, fully avoiding the Strait of Hormuz. Following the outbreak of hostilities, this pipeline was rapidly ramped up to maximum capacity, enabling Saudi Arabia to sharply boost Red Sea exports—and making it the Gulf producer least affected by the crisis. Although the Houthis later launched targeted attacks against Saudi tankers, Saudi vessels can still reroute via the Mediterranean and around the Cape of Good Hope—an extra voyage time of ~25 days—but this remains operationally manageable. The Houthis, however capable, cannot interfere with the Suez Canal. United Arab Emirates (UAE): Abu Dhabi Crude Oil Pipeline (ADCOP) + Fujairah Port on the Gulf of Oman. ADCOP runs directly from the inland Habshan oilfield to Fujairah Port on the Gulf of Oman—entirely bypassing the Strait—with current capacity of ~1.8 million barrels per day. Additionally, the UAE uses short-haul shuttle tankers that disable their transponders (“dark sailing”) to transfer crude within the Persian Gulf, then reload onto larger vessels offshore for export. Iraq: A patchwork of multiple channels supports its rebound. The latest information available shows Iraqi Oil Minister Abadi stating that Iraq’s average daily oil exports reached 2 million barrels in August—the highest since the outbreak of hostilities with Iran. This level is sustained by three concurrent channels: — Southern Basrah Port still sees limited vessels daring to transit the Strait of Hormuz, handling roughly half of total exports; — The northern Kirkuk–Ceyhan pipeline (running directly to Turkey’s Mediterranean port of Ceyhan) secured a minimum guaranteed flow of 750,000 barrels per day following an August agreement with Turkey—constituting the core source of incremental volume; — Supplementary routes include road tanker shipments across Syria and Jordan, plus re-export via UAE channels.

The Hormuz chokepoint: How geopolitics locks in inflation

【Answer 2】 Whoever controls the Strait of Hormuz holds the world economy by the throat. And in 2026, that throat is being squeezed—tight. What happened in the Strait? It all traces back to the U.S.–Iran conflict—or more precisely, the ongoing military standoff between the United States and Iran. Since early 2026, friction has intensified between U.S. warships in the Persian Gulf and fast-attack craft of Iran’s Islamic Revolutionary Guard Corps (IRGC). In May, an American oil tanker passing through the Strait was briefly detained by the Iranian Navy; the U.S. responded immediately by dispatching destroyers. Though neither side formally declared war, the safety of Strait transit has been utterly shattered. By August, actual throughput had fallen to less than 11% of pre-conflict levels. Under normal conditions, 18 million barrels pass through daily; now only about 2 million barrels barely manage to get through. Where did those missing 5–6 million barrels of crude go? They’re not unproduced—they’re simply unexportable. Iran has deployed large numbers of sea mines and anti-ship missiles east of the Strait. Though no vessel has yet been sunk, no shipowner or insurer dares risk passage. The alternative route—around the Cape of Good Hope—adds 15–20 days per voyage and has driven freight rates up fivefold. In its August report, the International Energy Agency (IEA) revised its forecast for global oil supply deficits in Q3 2026 upward—from an earlier projection of 800,000 barrels per day to 1.8 million barrels per day. Note: this is a ‘supply deficit’, not ‘increased demand’. The world isn’t demanding more oil—it’s suddenly losing access to a massive volume of usable oil. So why hasn’t oil prices gone completely berserk? You might ask: With 5–6 million barrels gone, why is Brent crude still oscillating between $85 and $90—not surging toward $120 or $150? Four factors are suppressing prices: First, global demand itself is falling. The IEA simultaneously downgraded its 2026 global oil demand forecast—cutting it by over half a million barrels per day versus last month. Weak economic conditions mean fewer people driving and lower factory utilization—so oil consumption falls naturally. Demand contraction and supply contraction are racing each other. Second, releases from the U.S. Strategic Petroleum Reserve (SPR). The Biden administration announced a release of 50 million barrels from the SPR during summer 2026. Though dwarfed by daily deficits running into millions of barrels, this move provided meaningful short-term price containment. Third, ‘covert exports’ by Iraq and Qatar. TotalEnergies CEO revealed at the end of August that Iraq and Qatar have recently been quietly exporting oil through the Strait of Hormuz: nearly 200 vessels passed through last week—up sharply from just 40 two weeks prior. Iran’s actual control over the Strait is far weaker than its rhetoric suggests. Fourth, markets haven’t yet priced in the worst-case scenario. Hedge funds and traders are betting that the U.S. and Iran will eventually return to negotiations—and that the Strait will reopen. But here’s the problem: the negotiation window expired on August 17. Not only did the parties fail to extend it—they escalated rhetoric. Iran declared, ‘The Strait won’t reopen unless our conditions are met,’ while the U.S. stated, ‘All options remain on the table.’ Markets are betting on a deal—but what we’re seeing is breakdown, not breakthrough. This isn’t just about oil—it’s about inflation. You might think: Does it really matter whether oil trades at $85 or $90? It matters enormously. Oil is the lifeblood of industry—the foundational cost embedded in every good’s price.

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