Hormuz Tanker Traffic Drops Despite Recovery in Oil Flows

Tanker traffic in the Strait of Hormuz experienced a decline below its ten-day average as of this week, with only seven commodity vessels transiting the waterway on Thursday, according to Reuters citing preliminary data from Kpler. This figure stood in contrast to 17 vessels passing through Hormuz a day earlier, while the ten-day average stood at 15, based on ship-tracking data. A total of 17 tankers were reported to have passed through the Bab el-Mandeb Strait, comprising 11 exiting and six entering, per Reuters.

Windward reported a total of six tankers passing through the Strait of Hormuz on Thursday, with three entering in dark mode to evade detection. Four of the tankers entered the chokepoint and two exited, as reported by Bloomberg. Oil flows in Hormuz, however, are reportedly on the rise, with estimates ranging between 6 and 8 million barrels daily, according to unnamed traders' estimates.

Goldman Sachs, however, estimated oil flows out of Hormuz at two-thirds of pre-war levels, while ING’s commodity analysts echoed this sentiment, stating that more Persian Gulf oil producers are now using the strait to transport crude, while others are increasingly selling their crude outside the Strait of Hormuz. This adaptation in oil markets is driven by the shutdown of Hormuz.

Despite this, upward pressure on crude oil prices persists, according to ING’s Warren Patterson and Ewa Manthey, as hopes for resuming peace talks between Tehran and Washington remain low.

Additionally, there are speculations about Venezuela leaving OPEC following the takeover of its oil industry by the United States. While this could lead to higher production, expectations of a rapid shift are premature, given the need for time to reverse a long-standing decline. The U.S. partners in Venezuela would require time to effect this change.