Covert shipments through the Strait of Hormuz are helping to keep oil prices in check
Oil producers in the Middle East continue to export significant volumes of crude oil from the Persian Gulf through the Strait of Hormuz. The ships navigate the waterway with their transponders turned off and then transfer the oil to tankers in the Gulf of Oman, Fortune reports, citing Bloomberg.
Sources familiar with the shipments told the publication that the volume of such shipments exceeds market estimates of 4 million barrels per day, though they did not provide exact figures. Before the war with Iran began, about 20 million barrels of oil passed through the Strait of Hormuz daily—roughly one-fifth of global shipments. U.S. Energy Secretary Chris Wright stated last week that 9 million barrels per day had passed through the strait over the previous seven days.
According to estimates by traders and analysts, these shipments are one of the reasons why Brent crude futures traded within the range of $80–$90 per barrel for most of August. At the start of the conflict, some market participants expected the price to rise to $150 per barrel. The impact of the war is also being mitigated by alternative pipeline routes, the release of reserves, and declining demand in various countries.
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According to satellite data from the European Union’s Sentinel-1, there are about 150 vessels off the coast of Oman, compared to approximately 40 in January. Many of them are waiting to be transshipped from vessels crossing the Strait of Hormuz with their transponders turned off. Data from Bloomberg, Kpler, and Vortexa indicate that oil was transported in this manner from the UAE, Iraq, Qatar, and Kuwait.
The UAE’s state-owned oil company, Abu Dhabi National Oil Co., reported that 23 of its vessels have come under attack while transiting the Strait of Hormuz since the start of the conflict. According to the company, one person was killed and 20 crew members were injured. Saudi Aramco declined to comment on the possible increased use of Saudi ports in the Persian Gulf. According to Fortune, 16 supertankers belonging to Bahri are off the coast of Oman, and three more are heading to the transshipment area.
