A debate is brewing in the oil market: Is the Strait of Hormuz way more “open” than we thought? Common wisdom held that the crucial waterway is effectively closed to oil tanker traffic. Iran has fired on dozens of tankers attempting to transit the strait. Maritime tracking services using a combination of transponder data and satellite imagery have reported a significant decline in the number of vessels trying to navigate the waters. Global oil inventories continue to be depleted.
But U.S. Energy Secretary Chris Wright (R) told a very different story last week: The strait is open, and oil is flowing significantly faster than the market appreciates. He would know: The US military is right there, patrolling the water, escorting ships in and out of the strait, protecting them from enemy fire. The Navy provides the Department of Energy with detailed information about which vessels are moving through and when.
“In coordination with the US military, the US Department of Energy maintains the best available data related to oil and oil products leaving the Arabian gulf,” a DOE Spokesperson said. It’s not unlike the Trump (R) Administration to jawbone oil prices lower. Trump has repeatedly said the U.S. Controls the Strait of Hormuz and frequently claims that a deal with Iran is imminent. Secretary Wright has said the U.S. is ensuring plenty of oil is getting where it needs to go.
Ignoring the bluster, Wall Street Analysts have largely relied instead on the third-party tracking data they’ve been receiving, along with industry-reported inventory measurements and other data. But that might be changing. Or, at least, for the first time since the start of the war, some Analysts on Wall Street might at least be willing to consider that the Administration may be telling the truth about the state of the oil market. That could give the Trump administration significantly more leverage with Iran than previously believed.
Wright asserted that the seven-day average of oil flowing out of the Strait of Hormuz had increased to 9 million barrels per day. Hussain noted that stood in direct opposition to Iran’s claim that the strait was closed, and ship-tracking data that showed it was about half Wright’s number.
“It is becoming increasingly difficult to know how much oil is leaving the Gulf,” said Hamad Hussain, Senior Climate and Commodities Economist at Capital Economics. “Contrasting claims by US and Iranian officials are muddying the waters.”
Wall Street Aanalysts, who use ship tracking services like Kpler and Windward Intelligence, among many other data points, to provide estimates about oil flows, have said Oil Tankers have been getting roughly 4 million barrels of oil out of the Persian Gulf each day. In addition to the roughly 7 million barrels per day that Middle Eastern countries have rerouted around the strait through pipelines and other methods, about 11 or 12 million barrels have been flowing out, according to the Tracking Services. That’s significantly lower than the 20 million barrels per day that the region had exported before the Iran war started.
Wright said that on 8/8/2026 total oil coming out of the Gulf exceeded that 20-million-barrel mark. Kpler defended its data, which is powered by its network of 13,000 owned-and-operated receivers across 190 countries that track 350,000 vessels, updating their location every 5 minutes. It also owns a fleet of low-earth-orbit satellites. “It is not possible to reconcile the disparity between what we see and what he is quoting,” said Matt Smith, Ddirector of Commodity Research at Kpler.
Other ship-tracking services, such as Windward Intelligence, use satellite imagery and AI to track vessels, even if they turn their transponders off. That allows the tracking services to actively follow so-called shadow fleets that try to mask their location to avoid detection. Kpler also estimates shadow fleet traffic. Both Kpler and Windward showed around Five Ships, Total, exited the Strait of Hormuz on the day Wright said 20 million barrels flowed out of the Arab gulf region. More than 100 ships were transiting the strait each day before the war. It’s just not enough ships to accommodate that kind of oil flow.
But Hussain acknowledged the picture the Oil Market has been getting may be incomplete. Iran has become significantly more aggressive in its attacks on ships in recent weeks, and its Houthi allies have done the same in the Red Sea. That has led a growing number of vessels transiting the Straits of Hormuz and Bab-al-Mandeb in the Red Sea to do everything in their power to mask their locations and cargo to avoid attack. Around half of the traffic that Kpler has tracked through the Strait of Hormuz has been made up of shadow transits in recent weeks, up from around an eighth a month ago – and, the DOE argues, it’s not catching everything.
When the slow-moving tankers turn their transponders back on after they’re out of harm’s way, the market will probably realize much more oil has flowed out of the region than previously estimated, Hussain argued. Dan Pickering, founder and chief investment officer at Pickering Energy Partners, told CNN he was open to the Energy Department’s numbers.
“The US is enabling a decent amount of oil to get through the Strait, and Iran is not stopping everything,” He said. “In a world where the administration has earned a lot of skepticism, you probably can do no better take a trust-but-verify approach. It is certainly possible that he is right,” he added. Wall Street has acknowledged before it had been Misjudging how much Oil was getting out of the strait.
Natasha Kaneva, JPMorgan’s Head of Global Commodities Strategy, said in June that the relatively low price of oil had caused her to reconsider how much oil may be making it out of the Persian Gulf, acknowledging the possibility of a surprising amount of unaccounted-for “clandestine” oil moving on tankers with their transponders turned off. JPMorgan cites Kpler shipping information as one of several sources of data it tracks to reach its oil supply and demand estimates.
The market has largely chosen to side with the Trump administration. It has held out hope that a resolution is coming and the military can keep oil flowing. That has kept prices much lower than the largest-ever oil supply shock would suggest they should be. If more oil is flowing than we had expected, that could help rebuild oil stockpiles faster and keep oil prices lower for longer than Wall Street analysts had been anticipating, giving Trump economic and political cover in his standoff with Iran.
But the precise estimate of oil flows from the Persian Gulf doesn’t matter nearly as much for prices as it does for market stability, Hussain said. Global inventories are between 1.5 billion and 1.9 billion barrels lower now than they were at the start of the war, depending on who’s estimating. Massive crude stockpiles before the war helped prevent catastrophe when supply dried up.
Even though the oil market continues to run at a deficit, the more oil that comes out of the strait, the longer the market can stave off a looming tipping point at which its reserves become insufficient to supply the world with enough oil. “The market can’t keep pulling down inventories forever,” said Pickering. “Sooner or later, the cupboard runs bare.”
Michael H. Drucker
