Oil Flows Back as Gulf Rulers Bank the Barrels

Saudi Arabia pumped 10.563 million barrels of crude per day in October, over two million more than September, according to an OPEC report issued Wednesday. It's the kingdom's highest output since the United States and Israel launched the war on Iran in late February, when Riyadh was producing 10.882 million. Notice the detail buried in the report: Saudi Arabia sharply raised production in February, ahead of the US and Israeli strikes. The war is in its tenth month. The barrels are almost back.

Who Benefits

The recovery isn't Saudi alone. OPEC+, the club that bundles OPEC with Russia and other producers, pumped 41.23 million barrels per day in October, up about 2.04 million from September. That's 97 percent of the 42.72 million it produced in February, according to Reuters. Russia's rise came after US President Donald Trump lifted sanctions on Russian energy and announced an "energy ceasefire" between Ukraine and Russia in mid-October. Sanctions switched off, ceasefire declared, crude flowing. One presidential announcement, and the taps open.

Umud Shokri, an energy strategist and senior visiting fellow at George Mason University, told Al Jazeera the extra Saudi oil "could help ease some of the inflationary pressure facing American consumers." He added a caveat: "higher Saudi production does not automatically mean lower prices at American gas stations."

Who Gets Crushed

Inflation stood at 2.9 percent in February. By May, when the conflict closed off roughly one-fifth of global oil supplies moving through the Strait of Hormuz, annual personal consumption expenditures hit a three-year high of 4.1 percent. People paid at the pump and the grocery store for a war they didn't vote for. US gasoline fell below $4 a gallon this week for the first time in months, and the stubbornly high cost of living drove the Democratic Party's sweeping victories in last week's midterm elections. Voters got a new set of faces and the same oil market.

Japan, one of the world's largest economies, saw crude imports "fall sharply in September amid renewed disruptions to trade flows," the report noted.

Pipelines, Workarounds, and the Chokepoint

Gulf exporters are routing around the damage. The report's data, which it says rest on secondary sources, indicate producers are recovering exports through workarounds like ship-to-ship transfers. The UAE regained its position as top supplier in September with a 49 percent share, up from 25 percent the previous month. The US came second at 28 percent, Saudi Arabia third at 14 percent.

The Saudi East-West Pipeline, which carries crude to the Red Sea port of Yanbu without touching Hormuz, has been under attack by Houthi rebels in Yemen. The Houthis, who are fighting the Saudi-backed internationally recognised government in Aden, kept targeting it this week. Exports have stabilised anyway. The UAE, no longer an OPEC member, has a similar escape hatch through its pipeline to Fujairah, outside the strait.

Shokri put it plainly: "The bigger picture is that Gulf countries are learning how costly dependence on a single maritime chokepoint can be." They're hunting for resilience, he said, but "Hormuz remains too important to the global energy market to be easily bypassed."

The Forecast Economy

OPEC left its demand forecasts unchanged after cutting them six straight months. It expects global demand to rise by 2.55 million barrels per day next year to an average of 108.3 million, with growth of 180,000 in 2026. Qatar, Canada, Brazil and Argentina are tipped to drive production growth in 2027. For the Middle East, the cartel's report predicts that "the region's economy is expected to rebound and economic activity to recover, supported by a resilient non-oil sector and robust domestic demand."

The people who live in that region weren't consulted on the forecast. The report is written by the producers' own organization, about the producers' own recovery, in the middle of a war the producers' allies started. The ledger balances for the exporters. Nothing in it records who paid.