Middle Eastern oil exports have returned to prewar levels as shippers use alternative routes around chokepoints such as the Strait of Hormuz. Yet the oil price has kept rising in recent months, and attacks on shipping have increased in October.
Gulf oil producers shipped 24.6mn barrels a day in the week to October 18, excluding Iran, above the 23.3mn prewar average, according to Kpler data. Shipping companies are bypassing chokepoints such as the Strait of Hormuz, which was targeted in the conflict.
Exports rebound, but Hormuz flows lag
The seven-day average is the highest since mid-February, days before the US and Israel struck Iran and started a war that has stymied exports from the region. The figures are preliminary and far more volatile than before the war.
However, shipments through Hormuz itself are still more than a third lower than before the war, the data shows. The totals include ship-to-ship transfers just beyond the waterway and flows from Red Sea ports.
Prices keep climbing despite the rebound
Despite the rebound, the oil price has been rising in recent months as markets for some oil products show increasing signs of strain. On Tuesday, Brent crude hit its highest level since May, and on Wednesday it traded at $108.77 a barrel, flat on the day. For background on the benchmark, see the Brent crude glossary entry.
Red Sea route faces attacks
Saudi Arabia routed a lot of oil through its Red Sea port of Yanbu in response to attacks on ships sailing through the Gulf. Flows there have dipped periodically after attacks on the pipeline serving the port and on nearby ships, including a mid-September pipeline attack. Volumes have since rebounded after Saudi Aramco completed repair work.
Attacks on vessels are also rising. UK Maritime Trade Operations has reported 28 attacks on shipping in the region in October, after 18 in September. Two ships were targeted on Tuesday night, and one tanker was hit in the north of the Gulf near the Iraqi coast. Both crews were reported safe.
Source: Financial Times
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