Behind the political rhetoric, the economic costs are mounting for both sides.
Iran is under growing strain from the conflict and U.S. blockade. Inflation exceeded 80% in July from a year earlier, according to an ISNA report, while crude exports have fallen to 294,000 barrels per day (bpd) so far this month from 1.7 million bpd in 2025, according to analytics firm Kpler.
The U.S. is also paying a price. Trump has warned Americans to prepare for high fuel costs, an uncomfortable admission for a president who campaigned on lowering energy prices and now faces congressional elections in November. The average price of gasoline stood at $4.06 per gallon on Monday, up 29% from a year ago, according to the American Automobile Association.
Yet while diplomats remain deadlocked, the oil market is adapting.
The biggest uncertainty is the scale of supply disruptions. Flows of crude and refined products through Hormuz, which averaged about 18 million bpd before the war, fell to 4.8 million bpd in July and have averaged around 2 million bpd so far in August amid Iranian attacks and a U.S. blockade, according to Kpler.
Some of that lost volume has been offset by higher exports from the Fujairah terminal in the United Arab Emirates and from Saudi Arabia's Red Sea coast. Even those alternative routes, however, are under pressure after Yemen's Iran-backed Houthis imposed a blockade on Saudi exports through the Bab el-Mandeb Strait, at the Red Sea's southern entrance.
Taken together, Middle East exports averaged 9.5 million bpd this month, less than half the 21 million bpd in 2025, according to Kpler.
But those figures may understate — or overstate — actual exports because more regional oil appears to be moving in the shadows.
Evidence is mounting that Gulf producers are relying more heavily on vessels that disable tracking systems while transiting Hormuz and Bab el-Mandeb. The UAE, in particular, appears to have built a network of "dark tankers" that shuttle crude through Hormuz before transferring cargoes in the Gulf of Oman.
The result is an unusual situation in which traders know supplies have been disrupted but cannot determine by how much.
Indeed, UAE crude exports averaged 3.38 million bpd so far in August, compared with 3.2 million bpd in 2025. Yet those volumes could come under pressure after Iran reportedly struck several tankers linked to Abu Dhabi National Oil Company during voyages through Hormuz.
How much oil is actually reaching consumers has therefore become one of the market's biggest unknowns. As long as the Hormuz impasse remains unresolved, uncertainty will hang over energy markets.
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