The U.S. Wall Street Journal (WSJ) reported on the 4th (local time) that as crude oil exports from oil-producing countries in the Gulf region recovered to pre-war levels last month, Iranian attacks on ships resumed in the Strait of Hormuz.
According to Kpler, a shipping information company, from the 1st to the 28th of last month, crude oil exports to the Middle East, excluding Iran, reached an average of at least 16.5 million barrels per day. Compared to the region's export of nearly 19 million barrels per day before the outbreak of war in February, it has recovered to 87%.
Standard Chartered estimated that the total export volume of Saudi Arabia, the largest oil producer in the Middle East, rebounded from 2.45 million barrels per day in August to 6.9 million barrels per day in September.
The rapid recovery in crude oil shipments in recent weeks was due to the U.S. Navy's escort operations and a series of previous attacks that neutralized Iranian data and communications facilities along the disputed Strait of Hormuz.
In addition, it was helpful that oil-producing countries, including the United Arab Emirates (UAE), established a sophisticated ‘shuttle operation’ system. This is a method in which an oil tanker loads crude oil within the Persian Gulf, then exits the Strait of Hormuz and transfers the crude oil to another ship waiting outside the strait.
Of course, this comes with a significant economic burden.
“Recent crude oil transport speeds, while impressive, are by no means sustainable and have already come at a huge cost,” said Rory Johnston, founder of oil research firm Commodity Context. According to ship brokers, oil-producing countries in the Gulf region are paying a huge sum of $30 to $40 million ($15 to $20 per barrel) per shuttle operation to and from the Strait of Hormuz, excluding insurance premiums.
However, recent attacks on ships in the Strait of Hormuz appear to be increasing again.
The UK Maritime Trade Organization (UKMTO) has reported seven attacks targeting ships around the strait since the 28th of last month. The attack took place near the narrowest part of the Strait of Hormuz. UKMTO announced that another ship was attacked on the 4th, but the exact timing of the incident was not disclosed.
On the 3rd, Iran's Islamic Revolutionary Guard Corps (IRGC) Navy, with support from the United States, warned ships attempting to pass through the strait of the possibility of being attacked. The radio message obtained by WSJ said, "Do not trust the U.S. Navy, never use the southern passage, and do not risk your life."
Analysts say Iran's renewed offensive may already be taking a toll, and there are early signs that crude oil shipments are starting to decline.
Commodity Context's Johnston said he has seen a potential decline in recent days, with initial estimates suggesting daily shipments are down by 2 million to 3 million barrels.
Iran's ability to attack ships has improved in recent weeks, making the Strait of Hormuz more dangerous, according to a U.S. official. The official said the United States had said a few weeks ago that it would strike Iranian oil tankers in response to an attack by Tehran, but later withdrew that plan after Iran launched a barrage of missiles against a U.S. air force base in Jordan.
WSJ said that Iran's new ship attack clearly reveals how fragile the recovery in crude oil shipments is, and predicted that any new transportation disruptions would deal a blow to the global economy, which is already suffering from rising oil prices and interest rates.
Even though crude oil exports from the Middle East recovered last month, the international standard oil price remains at the $100 per barrel level. This reflects market concerns that if attacks resume, crude oil transportation volume will decline again and freight and security costs will remain high, the media analyzed.
“The intensification of attacks on ships shows how fragile the current balance in the oil market is and how easily it can be upset, especially if the situation worsens and energy infrastructure is targeted,” said Hamad Hussein, chief economist at Capital Economics.
Brent crude oil, the international crude oil standard, closed at $102.25 per barrel on the 2nd, rising about 5% on a weekly basis. Hussein predicted that the price of Brent crude oil will remain around $100 per barrel until the end of the year.
