Strait of Hormuz Closure: Oil Crisis and Saudi Profits
The United Arab Emirates has quietly withdrawn four commercial tankers from the Strait of Hormuz in recent days, operating them with deactivated transponders—a move that has raised alarms among regional allies and energy analysts. The vessels, registered under UAE flags but reportedly chartered by Saudi-led oil consortiums, were spotted near the strategic chokepoint by maritime surveillance networks, according to sources familiar with the matter. Their disappearance from automatic identification systems (AIS) tracking suggests a deliberate effort to evade detection, a tactic increasingly adopted by shipping firms navigating the volatile waters as tensions escalate between Iran and Israel.
The UAE’s decision comes as Saudi Arabia, despite the closure of the Strait of Hormuz, has defied expectations by expanding its oil revenues. Data from Saudi Aramco’s latest quarterly filings, reviewed by world-today-news, show the kingdom’s crude exports have surged by over 12% since March, when Iranian missile strikes disrupted global LNG supplies. The paradox stems from Saudi Arabia’s ability to reroute a portion of its oil through alternative pipelines and floating storage hubs in the Red Sea, a strategy that has allowed it to maintain—and even increase—profits even as other Gulf producers like Iraq and Kuwait face severe export constraints.
For Qatar, the economic fallout has been immediate and devastating. An Iranian ballistic missile struck the Ras Laffan LNG terminal on March 18, knocking out an estimated 17% of global LNG supply and inflicting damages that QatarEnergy CEO Saad Al Kaabi described as setting the region back “by 10 to 20 years.” The attack followed Israel’s bombing of Iran’s South Pars gas field, which borders Qatar’s North Dome reserves—the world’s largest natural gas deposit. While Qatar’s state-owned energy firm has not disclosed a full cost estimate, industry projections cited by world-today-news sources suggest annual revenue losses could exceed $20 billion, with repairs potentially taking three to five years.
Saudi Arabia’s unexpected financial resilience contrasts sharply with the struggles of its Gulf neighbors. The closure of the Strait of Hormuz, which typically handles 20% of global oil shipments, has forced Iraq and Kuwait to halt exports entirely, while Oman and the UAE—both of which possess alternative transit routes—have seen their revenues stabilize or grow. The UAE’s recent tanker withdrawals may signal an effort to shield its own shipping sector from retaliatory strikes, though officials have not commented publicly. Meanwhile, Iran has accused the UAE of complicity in “economic warfare,” a claim Dubai’s government has dismissed as baseless.
The Strait’s closure has also exposed the fragility of OPEC’s cohesion. The UAE announced in early May it would exit the oil cartel, a decision analysts link to its ability to bypass Hormuz-related disruptions. The move has sent ripples through OPEC, with Saudi Arabia and Russia reportedly pressuring the UAE to reconsider, though no formal response has been issued. The cartel’s next meeting, scheduled for June, will likely focus on coordinating production cuts—but the UAE’s defection underscores how the Hormuz crisis is reshaping energy geopolitics beyond Iran-Israel tensions.
For now, the UAE’s tanker disappearances remain unexplained. Maritime experts speculate the vessels may be rerouted to avoid Iranian naval patrols or used for covert oil transfers to Asian buyers. But with no official confirmation, the operation’s true purpose—and its implications for regional stability—remains unclear. One thing is certain: the Strait of Hormuz is no longer just a waterway. It has become a battleground where economic survival and geopolitical strategy collide.