Hormuz Crude Flows Surge Above Pre-War Levels Amid Geopolitical Tensions

Crude oil prices saw a dip in early trading, even as Brent crude remained above the $100 mark. This shift came after Kpler reported that crude oil flows through the Strait of Hormuz have surpassed pre-war levels, despite ongoing geopolitical tensions. At the time of writing, Brent crude was priced at $101.20 per barrel, while West Texas Intermediate (WTI) stood at $89.73 per barrel. Interestingly, both Brent and WTI showed gains from Friday, indicating that some traders were awaiting stronger evidence of improved flows.

According to provisional data from Kpler, oil flows out of Hormuz ranged from 19.5 million to 22.5 million barrels daily between September 27 and September 29. This represents a significant rebound, nearly doubling the daily flows from a month earlier, even amid reports of substantial disruptions to Saudi energy infrastructure. The data also follows weeks of reports suggesting that daily flows were below the ten-day moving average, which had raised concerns among energy market commentators. These concerns were further fueled by Iranian attacks on tankers in the Strait, though some analysts dismissed these attacks as a significant factor influencing prices.

Additionally, the Kpler data revealed that liquefied natural gas (LNG) flows out of Hormuz have returned to pre-war levels. This is a noteworthy development, especially considering that QatarEnergy remains in force majeure mode on exports. Reports indicate that QatarEnergy is exploring emergency purchases of LNG cargoes to fulfill some of its long-term contracts, but it is unlikely that flows from the world's third-largest LNG exporter have fully recovered amid these circumstances.