Covert Gulf oil shipments through Hormuz help keep global prices in check - Bloomberg
Middle Eastern oil producers are covertly moving more than 4 million barrels of crude a day through the Strait of Hormuz, helping prevent a sharp rise in global oil prices despite continued Iranian attacks on vessels, Bloomberg reports. The workaround also matters for Ukraine: Russia relies heavily on oil export revenues to fund its state budget and war effort, making global oil prices an important factor in Moscow’s ability to finance the war.
Tankers cross the strait with their transponders switched off before transferring their cargo to other vessels in the Gulf of Oman, which then carry the oil to buyers around the world.
The volumes transported through the system exceed market estimates of 4 million barrels per day, people familiar with the shipments told Bloomberg. Oil from the United Arab Emirates, Iraq, Qatar, and Kuwait has been transported using the arrangement, according to vessel-tracking data compiled by Bloomberg as well as data from Kpler and Vortexa.
Before the Iran war, around 20 million barrels of oil passed through Hormuz every day, equivalent to roughly one-fifth of global oil supply. Last week, U.S. Energy Secretary Chris Wright said about 9 million barrels per day had crossed the strait over the previous seven days.
The covert shipments, together with alternative pipelines, releases from oil stockpiles, and weaker global demand, have helped limit the impact of the conflict on energy prices. Brent crude has traded mostly between $80 and $90 per barrel in August, far below the $150 level some market participants had feared if the war continued through the summer.
The scale of the operation is also visible off the coast of Oman. Around 150 vessels are currently gathered there, compared with roughly 40 in January, according to European Union Sentinel-1 satellite data cited by Bloomberg. Many are waiting to receive cargo from tankers crossing Hormuz with their transponders turned off.
The shipments remain dangerous. Abu Dhabi National Oil Co. said 23 of its vessels have been attacked while transiting Hormuz since the conflict began, killing one crew member and injuring 20 others.