Twenty percent of the world's oil supply vanished when Iran closed the Strait of Hormuz . Three months later, the barrels are moving again—just not through the strait, and not from the producers who used to control the market.
Venezuela's crude exports rose 14% in May to around 1.25 million barrels per day, the highest level in over seven years , Reuters reported. US oil exports jumped to 5.2 million barrels per day in April, a more than 30% increase over the 3.9 million bpd exported in February , according to Kpler data. Meanwhile, nearly 8% of Norwegian offshore workers plan to strike from June 5 unless wage talks succeed—threatening Europe's largest gas supplier at the worst possible moment. The Hormuz crisis didn't break the oil market. It fractured OPEC's grip on it.
Can Non-OPEC Producers Actually Replace the Gulf?
Not entirely, but they're trying. March was the busiest month in the history of the Port of Corpus Christi, with oil exports increasing to about 2.5 million barrels per day since the war started compared to 2.2 million bpd last year , CEO Kent Britton told CNBC. Ship traffic rose to more than 240 vessels in March compared to the 200 the port normally sees . The Texas port has become the world's third-largest oil export terminal by default—the two bigger ones, Ras Tanura and Basra, are stranded behind the blockade.
Venezuela's resurgence is even more striking. International companies including Shell, BP, Repsol, and Eni are rapidly expanding in Venezuela, with deals worth billions getting closed under US management of the country's oil resources . Shell's Dragon offshore field contains an estimated 4.5 trillion cubic feet of natural gas , while Eni's Junin-5 field in the Orinoco Belt contains 35 billion barrels of certified oil in place .
But there's a catch. The re-routing of ships to the US Gulf Coast is probably more of a wartime crisis measure than a permanent realignment, because light sweet crude that the US produces is a poor substitute for sour Middle East barrels , Matt Smith at Kpler noted. Asian refineries are buying American oil because they have no choice, not because it's what their equipment was built to process.
What Happens When OPEC Can't Deliver What It Promises?
The cartel is going through the motions. OPEC+ announced it will raise oil output by 188,000 barrels per day in June in its first meeting since the UAE's shock departure . Saudi Arabia's quota will rise to 10.291 million bpd in June, far above the kingdom's actual production of 7.76 million bpd reported in March .
The gap between what OPEC says and what it can physically ship has never been wider. The move is largely symbolic because member nations in the Middle East will be unable to implement the increase unless the Strait of Hormuz is reopened . Only Saudi Arabia and the UAE have operational crude pipelines that could potentially bypass the strait, with an estimated 3.5 to 5.5 mb/d of available capacity , the IEA notes—but the logistics and supply chains needed to re-route and export substantial flows have not been robustly tested .
The UAE's exit compounds the problem. Along with Saudi Arabia, the UAE was one of the only OPEC producers with meaningful spare capacity—Abu Dhabi's departure means the group has fewer shock absorbers available to deal with future supply shocks . With production capacity reaching approximately 4.85 million bpd against a quota ceiling of roughly 3.5 million bpd, the UAE was sacrificing roughly 1.35 million bpd of monetizable output before it walked away.
