DUBAI-Iran's ability to choke off oil flowing through the Strait of Hormuz-and use that as leverage in talks with the U.S.-is breaking down, raising the risk it will resort to military escalation to bolster its position.

The erosion of Iran's position comes as the U.S. Navy and Gulf oil producers have become better at fending off or evading Iranian attacks, allowing more tankers to cross the strait.

Middle Eastern crude exports rebounded this month to around their highest level since the war began in February, oil data trackers say. Shipments via Hormuz and bypass routes were delivering just under 80% of their prewar regional flows as of last week, according to tracker Kpler.

So far this month, crude exports from major Middle Eastern producers including Saudi Arabia, Iraq, the U.A.E. and others-moving through Hormuz and alternative routes-have risen to almost 13 million barrels a day. That is the highest total since February, when the region exported nearly 19 million barrels a day, according to ship tracker Huax.

Saudi Arabia is also starting to pump crude through its damaged East-West pipeline and load it on tankers in the Red Sea, though volumes remain reduced, officials familiar with the operations said. Some of the current output will be destined for domestic refineries, they said.

Iran, by contrast, has been unable to move crude through Hormuz since the U.S. reinstated its maritime blockade in July. The stores of oil that Iran had stockpiled beyond the blockade could run out by mid-October, Kpler estimates, choking off a vital source of revenue as the country's economy buckles under the pressure of sanctions and the strain of war.

The shift weakens Tehran's ability to extract concessions by holding global energy supplies hostage, undercutting one of its most potent sources of leverage in talks to wind down the conflict.

But it also creates a dangerous incentive. With its own oil income dwindling and its neighbors finding workarounds, Iran might see renewed attacks as its best remaining means of applying pressure, even at the risk of American retaliation.

"It shows the diminishing returns of Iran's Hormuz approach," said Sanam Vakil, director of the Middle East program at London think tank Chatham House. "That could lead to a more explosive dynamic where they will have to provoke or press the go button on a larger conflict themselves in order to get out of this bind."

Gulf oil producers fear their energy infrastructure could be exposed to new attacks. The Islamic Revolutionary Guard Corps, which safeguards the Iranian regime and is active in the Strait of Hormuz, has changed tactics rapidly and could increase attacks on ports, refineries and pipelines, regional officials said.

The Revolutionary Guard also coordinates a network of regional militias. Already, Iran has responded to growing pressure on its economy by expanding the fight to the Red Sea via its Houthi allies in Yemen, who have attacked Saudi shipping and facilities.

The stakes in any escalation extend far beyond the region. The global economy remains vulnerable to any renewed disruption to the region's energy flows. While the rebound in exports eased pressure on oil prices, successful hits could quickly send prices higher.

"In the absence of a decisive end to the conflict, the balance of risks to oil prices will remain skewed to the upside," said Hamad Hussain, a senior economist at Capital Economics.

After the U.S. and Israel launched the war in February, Iran's attacks on the strait severely disrupted shipping and forced Gulf producers to look for workarounds. Saudi Arabia diverted crude across the desert to the Red Sea, while the United Arab Emirates used its pipeline to the port of Fujairah on the Gulf of Oman, but those didn't fill the gap. Oil prices rose and with them the cost of gasoline and diesel for American consumers.

Iran used that leverage to cut a deal with President Trump in June that promised upfront financial relief for reopening the waterway. That deal fell apart when Iran started attacking commercial ships in the strait.

The U.S. reinstated its blockade of Iranian ports in July while stepping up efforts to help other countries' ships through the strait. Gulf exporters often rely on an elaborate system of loading crude at their export terminals inside the strait, shuttling it through Hormuz, then transferring it to other ships off the coast of Oman for distribution to global markets.

On Friday, Trump rejected a new Iranian ceasefire proposal that would have opened the Strait of Hormuz and ended the U.S. blockade of Iranian ports for seven days to give space for negotiations.

Iranian Supreme Leader Ayatollah Mojtaba Khamenei, who hasn't appeared publicly since succeeding his slain father, referred to "the defenders of the Strait of Hormuz" in a statement issued in his name Monday. The rhetoric underscores that Tehran still sees control of the waterway as a crucial way to pile some pressure of its own on the U.S. and its allies.

The escape routes around Hormuz have proved vulnerable. Drone strikes earlier this month from Iraq forced the shutdown of Saudi Arabia's East-West pipeline, while Houthi threats have made Red Sea shipping more hazardous. That pushed Aramco to redirect more oil back toward Hormuz.

The workarounds are also balky and expensive. Gulf officials say they are only temporary arrangements and not sustainable over the long term.

Iran has no comparable way around the strait. Its newly loaded crude remains trapped behind the American blockade at the mouth of the Gulf. Analysts estimate trucks could carry no more than 40,000 barrels daily, a sliver of prewar exports of nearly 2 million.

Meanwhile, the volume of Iranian crude already on vessels outside the blockade-which is still generating revenue for Tehran-has fallen to around 15 million barrels from 29 million barrels in early September. Kpler expects those barrels, most of which are destined for China, to be depleted by early to mid-October at the current pace.

"Probably within the next two weeks...they are going to make their final deliveries of oil to China, and then they will have nothing," Treasury Secretary Scott Bessent said Sunday on Fox News.

For now, Iranian attacks on ships in Hormuz appear to have eased. The U.K. Maritime Trade Operations, or UKMTO, which is affiliated with the Royal Navy, reported Sunday that no confirmed attacks or disruptions had occurred in Hormuz during the preceding 72 hours, although the threat remained severe.

The latest attack in the strait listed by the UKMTO was on Sept. 23, despite recent Iranian media claims of continued assaults. The pause could have been a way to test Trump's appetite for a deal during last week's United Nations General Assembly, analysts say, but it might be a temporary lull.

"If Iran's leadership feels its control over Hormuz is weakening, that does increase the risk they will look for other ways to escalate the conflict," said Richard Bronze, co-founder and head of geopolitics at Energy Aspects.