Oil-Shuttling Service Rebounds as Hormuz Flows Pick Up

The oil-shuttling service that helps get cargoes out of the Strait of Hormuz has picked up again after a recent lull, aiding millions of barrels' escape as Middle East hostilities escalate.

At the height of the war, this service emerged as a lifeline for some producers who use vessels to ferry supplies, often with transponders off to avoid detection, out of the Persian Gulf onto other ships outside the waterway, which then travel on to buyers around the world.

While flows through Hormuz remain below pre-war levels, the barrels that have left have been key to alleviating some of the worst fears of an oil-price spike. After a pullback in shuttling earlier this month as the ceasefire unraveled and vessels were attacked, the trade has rebounded in recent days.

At least two shippers involved in moving barrels through the strait are now ferrying volumes close to levels seen prior to the escalation in hostilities, which pushed oil back to $100 a barrel last week. Satellite data suggest more ships are leaving, with at least seven pairs of ships conducting ship-to-ship transfers off Sohar on Thursday.

According to US Energy Secretary Chris Wright, the American military continues to escort barrels through Hormuz, and about 13 million barrels a day are leaving the Gulf, half through the strait and half via bypass pipelines. The transits are vital for the global market, as before the war Hormuz carried about a fifth of global oil volumes, or about 20 million barrels a day.