ChokepointsBrief
Hormuz crude flows recover to pre-war levels as benchmarks post fourth monthly gain
LNG and product export recovery lags crude recovery as shipping costs hit all-time highs.
Crude oil flows through the Strait of Hormuz have recovered to pre-war levels eight months into the Iran conflict, according to reports cited by multiple market observers. Brent and WTI benchmarks are set to post their fourth consecutive monthly gain despite the recovery in crude export volumes from the Persian Gulf.
LNG and product exports trail crude recovery#
LNG and refined product exports from the Middle East have not matched the recovery seen in crude oil flows, according to Seatrade Maritime. The divergence between crude and product export performance reflects differing risk profiles and vessel availability across cargo types. No figures for the volume gap between crude and product exports were disclosed in the reports.
Shipping costs reach record levels as tanker availability tightens#
Shipping costs for Middle East crude have reached all-time highs, prompting producing countries to discount their oil to stimulate demand, according to UBS commodity strategist Giovanni Staunovo quoted by the Wall Street Journal. Saudi Arabia has shifted to ship-to-ship transfers off the coast of Oman to reduce exposure to attacks in Hormuz and the Red Sea, contributing to a shortage of available tankers. The recovery in crude flows has coincided with a sharp deterioration in maritime security as vessels remain exposed to attacks and insurance and freight costs have risen sharply, Staunovo said.
Physical and futures prices converge after months of divergence#
JP Morgan's head of global commodities Natasha Kaneva said her oil price model suggests a fair value of ninety-four dollars per barrel for Brent crude, as quoted by the Wall Street Journal. Physical oil prices surged in the early weeks of the conflict while futures markets showed only modest increases, but the two have begun converging in recent months. Physical prices have declined from their highs earlier this year while futures have risen, narrowing the gap between the two markets.
Sources2 sources across 2 domains
- seatrade-maritime.comSeatrade MaritimeCrude oil flows recovering from Middle East while LNG and product exports lag
- oilprice.comOilPrice.comHormuz flows recovered to pre-war levels, benchmarks set for fourth monthly gain, shipping costs at all-time highs, Saudi Arabia shifting to ship-to-ship transfers, JP Morgan fair value estimate of ninety-four dollars for Brent
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MENA Trade Monitor is published by Arabian Media Network. Pieces are produced by the Chokepoint Watch with AI-assisted synthesis of the cited sources and automated verification against the network's editorial policy. Every piece carries a desk rather than a reporter. Corrections are recorded on the piece and on the corrections page.
Transits, closures, advisories, war risk premia and rerouting cost for Hormuz, Bab el-Mandeb and Suez. Same day, same shape, always numbers.