Hormuz Tanker Traffic Drops Despite Recovery in Oil Flows

Tanker traffic in the Strait of Hormuz slowed below the ten-day average this week, with only seven commodity vessels traversing the waterway on Thursday, Reuters reported today, citing preliminary data from Kpler.

This compared to 17 vessels passing through Hormuz a day earlier, with the ten-day average at 15, based on ship-tracking data. A total of 17 tankers passed through the Bab el-Mandeb Strait, 11 of them exiting and six entering, per Reuters.

Windward, meanwhile, reported a total of six tankers passed through the Strait of Hormuz on Thursday, three of them in dark mode to avoid detection. Four of the tankers entered the chokepoint and two exited.

Bloomberg, however, reported that oil flows in Hormuz are on the rise, with oil moving out of the chokepoint at a rate of between 6 and 8 million barrels daily, according to unnamed traders’ estimates. Goldman Sachs reinforced the bearish message, estimating oil flows out of Hormuz at two-thirds of pre-war levels.

ING’s commodity analysts echoed Goldman’s estimates, saying “More Persian Gulf oil producers seem to be shuttling their crude through the strait, while producers in the region are increasingly selling their crude outside the Strait of Hormuz,” in evidence that oil markets are adapting to the new reality of a shut-down Hormuz.

Upward pressure on crude oil prices remains, however, as noted by ING’s Warren Patterson and Ewa Manthey, amid waning hopes for a resumption in the peace talks between Tehran and Washington.

On the other hand, there is talk about Venezuela leaving OPEC now that its oil industry is under the control of the United States. A Venezuelan exit would mean higher production but expectations that this would happen fast would be premature. Venezuela, and its U.S. partners, would need time to reverse a decline that has lasted for years.

By Irina Slav for Oilprice.com

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