September 30th, 2026: Iran’s Hormuz Strategy Is Starting to Break & Russia’s Drone Problem Grows

Mike Baker (0:01)

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It's Wednesday, the 30th of September. Would you look at that? The last day of the month. This entire year is flying by.

I guess that's what happens when the year is chock full of conflicts and crises and kerfuffles.

Welcome to the President's Daily Brief. I'm Mike Baker from Your Eyes and Ears on the World Stage, and currently in London, where I have it on good authority actually that the King is our frequent listener of the PDB. Huzzah. All right, let's get briefed. First up, Tehran's strategy of using Hormuz as economic leverage is starting to falter as Gulf producers find ways around the pressure. I'll have the details. Later in the show, the Kremlin is pushing Russian companies to pay for their own drone defenses. That's right, as Ukrainian strikes increasingly threaten industrial sites deep inside Russia. And in a classic communist move, if a company there chooses not to pay to protect their property, well, the state can seize that property because, well, yay Stalin. Plus, America's military cyber forces are being brought into the fight to protect November's midterm elections from foreign hackers and influence operations.

And in today's Back of the Brief, Seoul says North Korean mines were behind an explosion that wounded two South Korean personnel inside the DMZ just last week, raising fresh tensions along the border. But first, today's PDB Spotlight.

For months, Iran has worked to turn the Strait of Hormuz into one of its most powerful weapons in the conflict with the US. Basically, disrupt the flow of oil, drive up costs for regional producers and the global economy, and use that pressure to extract concessions from Washington. And that leverage has worked for them over the past few months. But that situation has been changing recently. Middle Eastern crude exports rebounded sharply in September, reaching their highest level since the war began in February. According to data from Kepler cited by Reuters, regional exports climbed to more than 16 million barrels a day this month, with nearly 10 million barrels a day moving through the Strait of Hormuz. Saudi exports have more than doubled from August levels, and 19 of the largest class of crude tankers passed through the Strait just last week.

In other words, Iran has not lost the ability to threaten the Strait of Hormuz, but its effort to choke off the waterway is becoming less effective.

Saudi Arabia and other Gulf producers have spent months adapting. Tankers are moving under tighter security. Producers are using ship-to-ship transfers and alternate routes. Saudi Arabia has restarted its east-west pipeline, allowing crude to move across the kingdom and out through the Red Sea. The UAE has its own pipeline reaching Fujera on the Gulf of Oman, bypassing the Strait of Hormuz entirely. These alternatives are expensive, imperfect, and still vulnerable to attack. But they're working well enough to get substantially more oil out of the region.

And Iran has a much bigger problem. Tehran does not have anything comparable to Saudi Arabia's Red Sea route or the UAE's bypass pipeline. Since the US reinstated its maritime blockade in July, Iran has been unable to move newly loaded crude through the Strait of Hormuz in meaningful quantities. Its oil is effectively trapped behind the blockade. And the oil that Iran had prepositioned beyond the reach of the blockade has largely been sold. According to the Wall Street Journal, Iran had roughly 29 million barrels of crude aboard vessels outside the blockade earlier this month. That's now fallen to around 15 million barrels. Kepler estimates those remaining stocks could be depleted by early to mid-October if sales continue at the current pace. Treasury Secretary Scott Bessent went further over the weekend, predicting Iran could make its final major deliveries to China within roughly two weeks. That is the administration's assessment. Iran has rejected claims that Washington has broken its control of the Strait of Hormuz. Iran tried to make the Strait a problem for everyone else. Increasingly, the Strait is becoming a bigger problem for Iran. And that has implications for the negotiations that we've been following. Well, such as they are. Control of the waterway was supposed to give Tehran leverage. Iran could restrict the flow of Gulf oil and offer to reopen the waterway in exchange for an end to the American blockade, sanctions relief, unfrozen assets and other concessions. The oil market is beginning to reflect the increased traffic through the Strait. Crude prices moved lower Tuesday as traders focused on the rebound on Middle Eastern exports and the reopening of Saudi Arabia's East-West pipeline, although prices do remain elevated and the threat to regional infrastructure is still significant.