Strait of Hormuz Oil Flow Recovers to 60%, Prices Steady
As Iran’s blockade of the Strait of Hormuz continues, more tankers are crossing the strait with their automatic identification system (AIS) turned off, helping crude supplies recover and international oil prices remain relatively stable. According to European commodities analytics firm Kpler, the volume of crude that passed through the Strait of Hormuz this month averaged 9.36 million barrels a day, up 3.56 million barrels from August. That is the highest since the U.S.-Iran military clashes began at the end of February and has recovered to about 60% of the roughly 15 million barrels a day that passed through before the clashes.
Tanker Stealth Transits Contribute to Recovery
The recovery of crude supply through the Strait of Hormuz to about 60% of the level before the U.S.-Iran military clashes is partly due to an increase in tankers transiting the strait with AIS turned off. Turning off AIS makes it harder to track a ship’s position, reducing the risk of Iranian drone attacks or seizure. Kpler’s estimate of crude volumes through the Strait of Hormuz included oil carried by tankers with AIS turned off.
Saudi Arabia and Iraq Increase Crude Shipments
Recently, Saudi Arabia and Iraq have been increasing crude shipments through the Strait of Hormuz. Saudi Arabia boosted oil exports rerouted toward the Red Sea immediately after the U.S.-Iran clashes, but after a pipeline was hit by a drone attack, it is said to be expanding exports through the Strait of Hormuz again. According to U.K.-based commodity price agency Argus Media, Saudi state oil company Aramco has launched a spot tender to supply crude delivered in September–November via ship-to-ship transfer off Oman. This is unusual given that Saudi Arabia has typically sold crude based on long-term contracts and its monthly official selling price (OSP).
International Oil Prices Show Relative Stability
As crude transport through the Strait of Hormuz recovers, international oil prices are also showing relative stability. West Texas Intermediate (WTI) futures traded at $91–$95 a barrel on the 25th. That is about 20% lower than the record high in the $119-a-barrel range reached after the U.S.-Iran military clashes.
Conclusion
The recovery of crude supply through the Strait of Hormuz to about 60% of the level before the U.S.-Iran military clashes is a positive sign for the global oil market. The increase in tanker stealth transits and the expansion of crude shipments by Saudi Arabia and Iraq are contributing factors to this recovery. As international oil prices remain relatively stable, it appears that the Strait of Hormuz remains a critical chokepoint in global energy supply chains.
Original Article: Tanker stealth transits lift Hormuz oil flow to 60% and steady prices – CHOSUNBIZ — Chosun