Hormuz Shipments Rebound Amid US-Iran Tensions

Oil shipments through the Strait of Hormuz have recovered to pre-war levels, easing supply concerns and contributing to a softer Brent price profile. According to Geoff Yu at BNY, crude exports from Kuwait and Qatar have restored to about 70% of their pre-conflict volumes, boosting overall flows through the strategic chokepoint.

Total oil movements through the Strait of Hormuz have increased to roughly 7mn to 8mn barrels per day from about 4mn in mid-July. This rebuilding of physical supply has provided more comfort to markets that had been bracing for extended disruption, compressing the disruption premium despite ongoing U.S.-Iran tensions.

The price of Brent crude has retreated significantly from its late-April high, trading near $87/bbl. Geoff Yu notes that the normalization of flows has reduced the degree to which energy prices threaten the broader disinflation trend.