Less than a month ago, **** ysts were warning of a looming glut of crude oil as tanker traffic via the Strait of Hormuz began to recover amid a U.S.-Iran ceasefire. Within days of these warnings, the ceasefire was a painful memory, missiles were flying again, and now Yemen's Houthis are striking tankers in the Red Sea, which makes two blocked oil chokepoints and a very real danger of a global recession.
Brent crude this week topped $100 per barrel on reports that the Houthis had struck two Saudi tankers in the Bab el-Mandeb Strait, which Saudi Arabia is currently using as the primary outlet for its crude amid the Iranian blockade of the Strait of Hormuz. Soon enough it emerged that tankers that were heading to the Red Sea waterway were making U-turns and heading to alternative routes—which take longer and cost more.
Meanwhile, Ukrainian drone strikes on the Caspian Pipeline System's terminus on the Black Sea have forced Kazakhstan to suspend most of its oil exports. The target of the drone attacks was the Novorossiysk port on Russia's Black Sea coast, which also happens to be the point of departure of the bulk of Kazakh oil exports to world markets. Bloomberg reported this week that tanker operators were getting nervous about sending their vessels to the port of Novorossiysk because Ukrainian drones were also striking ships at the port.
The Strait of Hormuz used to see average daily oil volumes of some 20 million barrels daily. This has now slowed to a trickle. The Red Sea chokepoint of Bab el-Mandeb has been handling between 4 and 5 million barrels daily of Saudi oil in recent weeks, according to different estimates. Now, this too appears to be almost completely blocked. Add to this the loss of 1.7 million barrels daily in Kazakh flows to Novorossiysk, and the global oil supply picture takes on a rather grim tint. Additionally, the Ukrainian forces continue to target Russian refineries, which has already led to a temporary ban on diesel exports at a time when global fuel inventories are getting strained by the first-wave effects of the Middle East war.
In fact, the situation with refined petroleum products is a major crisis in its own right. "Unlike crude oil, refined products face far fewer mitigation options. Several Middle Eastern refineries remain affected by the ongoing conflict while Russia's diesel export restrictions continue to constrain global availability," Ole Hansen, Saxo Bank's head of commodity strategy, said in an **** ysis earlier this month. "Refining capacity globally also remains relatively limited, preventing crude supply increases from quickly translating into additional diesel and gasoline production," he added.
#daily #exports
Brent crude this week topped $100 per barrel on reports that the Houthis had struck two Saudi tankers in the Bab el-Mandeb Strait, which Saudi Arabia is currently using as the primary outlet for its crude amid the Iranian blockade of the Strait of Hormuz. Soon enough it emerged that tankers that were heading to the Red Sea waterway were making U-turns and heading to alternative routes—which take longer and cost more.
Meanwhile, Ukrainian drone strikes on the Caspian Pipeline System's terminus on the Black Sea have forced Kazakhstan to suspend most of its oil exports. The target of the drone attacks was the Novorossiysk port on Russia's Black Sea coast, which also happens to be the point of departure of the bulk of Kazakh oil exports to world markets. Bloomberg reported this week that tanker operators were getting nervous about sending their vessels to the port of Novorossiysk because Ukrainian drones were also striking ships at the port.
The Strait of Hormuz used to see average daily oil volumes of some 20 million barrels daily. This has now slowed to a trickle. The Red Sea chokepoint of Bab el-Mandeb has been handling between 4 and 5 million barrels daily of Saudi oil in recent weeks, according to different estimates. Now, this too appears to be almost completely blocked. Add to this the loss of 1.7 million barrels daily in Kazakh flows to Novorossiysk, and the global oil supply picture takes on a rather grim tint. Additionally, the Ukrainian forces continue to target Russian refineries, which has already led to a temporary ban on diesel exports at a time when global fuel inventories are getting strained by the first-wave effects of the Middle East war.
In fact, the situation with refined petroleum products is a major crisis in its own right. "Unlike crude oil, refined products face far fewer mitigation options. Several Middle Eastern refineries remain affected by the ongoing conflict while Russia's diesel export restrictions continue to constrain global availability," Ole Hansen, Saxo Bank's head of commodity strategy, said in an **** ysis earlier this month. "Refining capacity globally also remains relatively limited, preventing crude supply increases from quickly translating into additional diesel and gasoline production," he added.
#daily #exports
3 months ago
