Reports of oil flowing out of Hormuz - prices still high

Through the Strait of Hormuz off Iran, about a fifth of global oil was usually transported. But since the outbreak of war in February, maritime traffic has largely stood still for periods. The rest of the world then began to take fuel from their reserves to avoid an oil crisis.

Suddenly, at the end of September, it was reported that as much oil was transported through the Strait of Hormuz as before the outbreak of war. The company Kpler, which tracks shipping data, is behind the figures on the increased flow of oil cited internationally. Even the bank JP Morgan has reported large flows of crude oil out of the strait.

Despite the increased flow, Brent prices are at $104.34 a barrel, still well above pre-war levels.

There are several reasons why an increased flow through the Strait of Hormuz does not immediately make the risk of an oil crisis disappear. One reason is that the change may have been short-lived, according to Ole Hvalbye, oil analyst at ABG Sundal. There is a big difference between oil being able to come out and the market being able to rely on stable supplies going forward. He is supported by Thina Saltvedt, oil market analyst at Nordea.

- We have almost started to reach the same levels as before. But there is great uncertainty because we don't know if it will last, she says.

New attacks in October appear to have led to a decrease in maritime traffic in the area, points out Ole Hvalbye.

Christian Kopfer, commodity analyst at the investment bank Arctic Securities, also says that it is difficult to verify how much oil actually comes from the Persian Gulf and that you cannot blindly trust the statistics.

- There is other data that shows that it is about significantly smaller volumes coming from the Middle East, he says.

According to the International Energy Council's statistics, there were seven million barrels less oil on the market during the month of September compared to the same period last year.

- The prices on the market indicate that there is a large deficit and that you therefore have to draw from the stocks, says Christian Kopfer.

A short-term flow of oil out of the Persian Gulf is not enough to significantly affect the market, according to the analysts. Since the outbreak of war, the rest of the world has pumped fuel out of its reserves. If the market returns to normal, inventories will need to be replenished, which will prevent prices from falling as quickly.

- There is still a big hole to fill, says Thina Saltvedt.

Another problem with deliveries from the Strait of Hormuz is that it is mainly crude oil that comes out. Refined products, not least diesel, are all the more in short supply.

The refineries in the Gulf countries have been at low speed because of the war in Iran. Nor does Russia, which is otherwise a large diesel producer, supply any larger volumes to the world market. Sanctions and the fact that Ukraine damaged the country's refineries have hurt the economy.

- The lack of diesel and the high diesel prices are mainly due to the two ongoing wars, says Thina Saltvedt and calls it "a perfect storm".

Since fewer refineries in the world are operating than usual, the cost of refining the product is higher. Getting the crude oil out of the strait, often with the help of the US Navy, isn't free either.

- You simply have to pay the shipping companies that transport the oil an extremely large amount of money, says Christian Kopfer.