Oil Tankers Navigate Strait of Hormuz, Offering Limited Relief to Global Market

More oil tankers are navigating the Strait of Hormuz, offering some relief to the global oil market. Several ships carrying crude oil have exited the waterway recently. Some vessels are traveling with their satellite signals off, making tracking difficult. Iran has allowed Chinese ships to pass. Other oil companies are also moving cargoes. The number of supertankers hauling unsanctioned oil through the Strait of Hormuz has shown signs of rising in recent days, offering limited relief to an oil market that’s suffered the largest supply disruption in history. Four ships each hauling 2 million barrels of mostly-Iraqi crude have exited since May 10 — a rate close to 2 million barrels a day — according to vessel tracking data compiled by Bloomberg. Still, prior to the war, there were about 20 or so tankers of various sizes crossing the waterway daily. Oil traders are monitoring Hormuz flows closely because the blockage of the waterway has already cut about a billion barrels from global supply. While shipments from countries other than Iran have crept up, those from the Islamic Republic have slumped sharply since an American blockade. Also Read: Two LPG carriers cross Strait of Hormuz, set to reach India this week In recent weeks, some ships have crossed with their satellite signals off, meaning it’s possible the number increases down the line once those vessels re-emerge away from the Middle East. Hormuz has remained largely blocked since the war began in late February and has been subject to an international diplomatic arm wrestle ever since. Live Events Crude seen leaving Persian Gulf via the Strait Iran earlier this month laid out an updated process for ships wanting to cross Hormuz that involved dealing with a body called the Persian Gulf Strait Authority. At the same time, the US has maintained a blockade, from the edge of the Gulf of Oman, on Iranian ports. That has slowed maritime traffic in the region, though some vessels have been able to cross thanks to agreements between governments. Still, while a handful of tankers have been able to escape, it’s much less clear whether they’ll be willing to return given the risks to shipping. “There’s been an increase but the levels are so low that it won’t make much of a difference,” said Georgios Sakellariou, a freight analyst at Signal Maritime. “The major issue is that even if all the tankers inside leave, new ones won’t be entering anytime soon.” Of the four ships that departed with their signals on, three loaded crude oil in Iraq. The other is carrying cargoes from the United Arab Emirates and Kuwait, the vessel tracking data show. Also Read: India working on ₹40,000 cr subsea gas pipeline project to help mitigate risks brought to fore by Hormuz blockade Iran said on Thursday that it is now allowing Chinese ships to pass the Strait of Hormuz following discussions with the country’s foreign ministry. A day earlier, the supertanker Yuan Hua Hu became the third Chinese VLCC to cross the waterway. There’s been a similar trend in other markets too, with a series of very large gas carriers adding to the number of crossings in recent days. Tracking the number of ships crossing Hormuz has been complicated by the fact that some vessels have transited while switching off their satellite transponders. Last month, the boss of commodity trader Mercuria Energy Group said the company has been able to get vessels out of the waterway, but declined to elaborate on how. Middle Eastern oil companies, including Saudi Arabia Aramco Trading Co. and the UAE’s state-owned Abu Dhabi National Oil Co. have also moved crude cargoes through the waterway since it was closed, people familiar with the situation said last week.