Covert Oil Flows Keep Global Prices in Check Despite Iran War
Oil shipments through the Strait of Hormuz have been ongoing at a higher volume than previously estimated, helping to keep global oil prices in check. According to people with knowledge of the shipments, volumes are running higher than market estimates of 4 million barrels per day, despite recent attacks on vessels.
The covert transfers have become a crucial lifeline for global markets, which were bracing for a much worse supply shock when the Iran war broke out. Producers in the region, however, face significant risks and challenges, with ships subject to repeated hostility even with military protection.
US Energy Secretary Chris Wright reported that 9 million barrels per day crossed Hormuz over the previous seven days, a figure on the high end of estimated flows. The dark shuttle transits have combined with pipeline workarounds, stockpile releases, and reductions in demand to limit the economic impact of the war.
Saudi Arabia has not yet been shuttling large volumes of its own barrels through Hormuz, but there are tentative signs of more activity from the kingdom's ports inside the Persian Gulf. The country's tanker company Bahri is positioning vessels off Oman's coast for potential cargo transfers.