Middle Eastern Oil Producers Employ “Dark” Transits to Evade Iranian Threats
On July 25, the Greek-owned supertanker Kiku docked at Qatar’s Mesaieed oil export terminal, a significant port located 25 miles south of Doha. Loaded with crude oil, the Kiku set sail four days later, navigating through the Strait of Hormuz at a steady pace of 13 knots, nearing its maximum speed across the Persian Gulf.
However, on July 31, just off the coast of Dubai, the Kiku abruptly vanished from tracking screens after deactivating its AIS transponder, which is essential for broadcasting a vessel’s identity and position. To maritime monitoring services, it was as though the Kiku had completely disappeared. The vessel’s signal re-emerged on August 1, indicating that it had successfully navigated to a position on the opposite side of the Strait of Hormuz.
This maneuver was part of a novel strategy employed in the oil industry: “dark” transits escorted by US military forces during nighttime. The aim of this tactic is to minimize exposure to Iranian drone attacks, particularly after a previous attack on the Kiku that narrowly missed detonation.
Escorted Transits and Reduced Risks
With US Navy support, oil companies from Saudi Arabia, Kuwait, Qatar, and the UAE have engaged oil tankers to turn off their transponders as they transport oil from the Persian Gulf through the Strait of Hormuz to the Gulf of Oman, where they can transfer their crude oil to waiting vessels. This tactic alleviates the burden of insurance liabilities and risks of Iranian assaults from commercial shippers, effectively placing those concerns onto the US government and oil producers themselves.
The US Department of Energy has indicated that this approach has proved effective thus far, with oil traffic through the Strait of Hormuz maintaining an average of 8 to 9 million barrels per day—twice as much as projections from Wall Street analysts and shipping trackers like Kpler based on visible transponder data.
Global Oil Supply Disruptions
Recent observations in the Gulf of Oman highlighted over a dozen ship-to-ship transfer activities within a two-day period, with tankers ultimately destined for markets in China, Taiwan, South Korea, the Philippines, Vietnam, and Thailand. While this temporary measure provides relief to the oil market, the underlying situation demands a more permanent resolution, such as a negotiated peace to the ongoing conflict.
The prevalence of dark transits like the Kiku’s emerges against a backdrop of significant disruptions in the global oil supply, exacerbated by a war that has continued for six months, severely impacting available inventories. With US emergency reserves at their lowest since the early 1980s and China’s oil stockpiles teetering, oil prices remain under pressure as demand continues from bond market investors and consumers alike.
The Kiku’s Journey
The Kiku, specifically, cloaked its signal again around August 14 after concluding a week-long partnership with another supertanker, the Nave Electron, both spotted together in waters off Fujairah. The former departed, heading towards Ningbo, China, while the Kiku lingered in the Gulf of Oman before eventually reemerging, once again signaling its movement toward Qatar.
In a broader context, this tactic represents a significant shift for Middle Eastern oil producers, with Saudi Arabia rerouting about 5 million barrels of oil per day via its East-West pipeline to the port of Yanbu, thus moving additional oil around the Strait of Hormuz. Other production countries, including Brazil, Guyana, and Venezuela, have ramped up output to fill the gaps, while the United States has also contributed significantly to the market.
However, the aggregate oil inventories have suffered to the tune of a 10% decline since the start of the year, with some analysts warning that this trend may continue unless a resolution is reached.
Original Article: Middle Eastern Oil Producers Employ “Dark” Transits to Evade Iranian Threats — Ssbcrack