Persian Gulf oil exports rebound to two-thirds of pre-war levels — could keep oil below $90 mark - All the panicans and celebratocrats hoping for another forever war in Iran are hardest hit by this news, as the U.S. Navy continues clearing the way for tankers to safely transit the Strait of Hormuz and Saudi oil keeps finding its way out through the Red Sea. The 15 to 16 million bopd currently exiting the Persian Gulf region combines with other factors to create a market in some semblance of balance now. The markets will still react modestly to any resumption in hostilities - as we saw overnight - but the situation is vastly improved from July’s chaotic days, thanks to the United State Navy.
Key Excerpt:
Oil exports from the Persian Gulf have rebounded to roughly two-thirds of pre-war levels, which could keep prices below $90 even if the Iran war drags on, according to Goldman Sachs analysts.
Total exports of crude and oil products from the region have jumped to 15 million to 16 million barrels a day as tanker traffic through the vital Strait of Hormuz has started to pick back up, analysts including Daan Struyven and Yulia Zhestkova Grigsby wrote in a note.
That’s about 7 million to 8 million barrels below pre-war levels, but a huge improvement from the 5 million to 6 million barrels a day that were being transmitted through the waterway in March, the note said.
The flow is likely enough to keep oil in the high $70s to low $80s for the rest of the year – but there’s very little room for error, said Joe Adamski, managing director of ProcureAbility, a supply chain consultancy.
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How Xi Jinping Turned Oil From a Weakness Into a Geopolitical Weapon - One of the factors mentioned above stems from China’s decision to cut its crude imports by upwards of 4 million barrels per day during the early weeks of the conflict. This piece at the WSJ discusses the advantage China’s enormous national crude reserve gives the Xi Jinping government in the current geopolitical atmosphere.
