Middle East oil flows hold up as Hormuz attacks intensify

Middle Eastern oil shipments are proving resilient despite increasingly frequent and damaging attacks on merchant vessels around the Strait of Hormuz, gCaptain reported, carrying a Bloomberg analysis. Producer-owned tankers and ship-to-ship transfers outside the strait are helping maintain crude movements, although October-to-date volumes remain below levels recorded before the conflict.

The scale of the flows is uncertain. Kpler estimated Persian Gulf crude and condensate shipments at 24.6 million barrels a day in the week ending 18 October, while Vortexa put the same period at 18 million barrels a day. Both providers assessed pre-conflict flows at no less than 18.5 million barrels a day. Many tankers are sailing without transmitting positioning signals, complicating assessments of export activity.

For October to date, Kpler estimated Middle Eastern flows at 16.7 million barrels a day, against Vortexa’s 15.4 million. Their calculations use different approaches: Kpler combines Hormuz transits, net ship-to-ship movements in the Gulf of Oman and exports from Red Sea and Gulf of Oman ports. Vortexa totals shipments from Saudi Arabia, Iraq, Iran, Kuwait, the UAE, Qatar and Oman.

According to the report, Iraq is moving more oil through Hormuz, while Saudi Arabia is exporting from both its Persian Gulf and Red Sea coasts. Saudi production rose by a third in September to more than 8 million barrels a day after reaching a more than three-decade low in August. The International Energy Agency said UAE output had reached a record.

The security backdrop has nevertheless deteriorated. UK Maritime Trade Operations recorded 32 attacks around the Arabian peninsula in October so far, compared with 16 throughout September, gCaptain reported. Some strikes have damaged engine rooms, and at least one container ship has sunk this month. The UAE, Saudi Arabia and Kuwait have used their own tankers to shuttle oil through Hormuz for transfer to customers’ vessels outside the waterway.

Convoy movements and shuttle operations make loadings uneven, while missing positioning signals and withheld satellite imagery delay shipment identification and can prompt upward revisions. Regional volumes have also held up despite the loss of Iranian exports following a US blockade of its ports. Both tracking firms estimated Iran’s February shipments at nearly 2 million barrels a day.