By Sophie Lindqvist

Gulf freight and insurance expenses remain about 10 times their prewar level despite the Trump administration’s pause on major strikes against Iran. The pause has reduced fears of another escalation, but it has not restored ordinary commercial conditions.

How much supply has recovered?

The global oil market still faces high shipping costs, even as regional crude exports have nearly returned to prewar levels. The cost of sustaining those flows remains substantially higher than before the conflict began in February. Buyers may receive more barrels while sellers absorb much larger logistics bills.

Kpler reported: “Crude shipments through the Strait of Hormuz have averaged approximately 10.5 million barrels per day since the beginning of October, compared with 13.5 million barrels per day before the war.” Including alternative export routes, total Gulf crude shipments have recovered to approximately 16.7 million barrels per day, approaching the prewar average of 17 million barrels.

The supply recovery has contributed to falling oil prices. Brent crude traded below $90 per barrel on Tuesday, November 10, after reaching approximately $118 on October 30, although lower benchmarks do not erase the extra cost of moving Gulf output.

What does the strike pause change for Gulf producers?

It changes the immediate risk of escalation, not the commercial arithmetic. Gulf oil and natural gas producers still face elevated transportation costs, maritime security threats and uncertainty over long-term infrastructure investment.

Those expenses affect producer revenues, crude pricing differentials (price differences between grades or destinations) and the economics of supplying international customers. Freight and insurance costs roughly ten times prewar levels now form a material drag on the income producers receive for the same underlying volume.

Continued security concerns could also delay permanent repairs to damaged energy infrastructure. Operators may hesitate to commit substantial capital to facilities that remain exposed to further attack, extending the uncertainty beyond current shipping schedules.

Security measures carry a continuing price

The International Maritime Organization recorded 131 confirmed maritime incidents near the Strait of Hormuz between February 28 and November 9, including 35 during October. That security record helps explain why restored export volumes have not translated into prewar operating economics.

To maintain exports, regional producers have increasingly relied on naval escorts, coordinated tanker movements, alternative shipping corridors and ship-to-ship transfers. These arrangements have allowed substantial volumes of crude and liquefied natural gas (LNG) to reach international markets, but they come with freight and insurance expenses approximately ten times their prewar levels.

The arrangements reduce disruption at the price of higher logistics costs. They also show why a military pause does not guarantee a rapid normalization of commercial risk.

Diplomacy has not settled the central risk

Diplomatic efforts involving Qatar and Pakistan have yet to resolve major disagreements between Washington and Tehran, particularly over Iran’s nuclear program. The central market question is whether those negotiations can produce lasting improvements in maritime security. The source provides no timetable for an agreement.

Until an answer emerges, Gulf energy producers may continue delivering substantial volumes while absorbing operating expenses and investment risks tied to an unresolved conflict. A prolonged, lower-intensity conflict could become an enduring feature of regional energy markets.

That scenario creates opposing price forces. Recovering production and increased competition among exporters could place downward pressure on crude benchmarks, while continuing geopolitical risk could keep oil prices supported. The result can be higher market volumes without the margins and certainty that usually accompany them.

Investors face uneven exposure

For institutional investors, the issue extends across upstream production (oil and gas extraction), LNG exports, refining, shipping and energy infrastructure. The source does not quantify likely earnings effects for each segment, so the direction of exposure offers more certainty than the magnitude.

• Higher transportation costs may reduce producer netbacks (revenue remaining after key production and transport costs).
• Certain shipping operators may benefit from higher freight rates, though the source identifies no individual winners.
• Refiners may encounter changing crude discounts as regional flows and delivery economics adjust.
• Infrastructure developers face greater uncertainty over project timing and capital requirements, particularly where damaged assets remain vulnerable.

The practical test is not whether Gulf exports resume. It is whether freight and insurance costs fall, maritime incidents recede and operators commit capital again. Those conditions, rather than a single month of recovering volumes, will determine whether the pause becomes a durable market improvement.