- Loadings from Gulf Ports Jump 24% in a Week.
- Shippers on High Alert After Israel-Iran Conflict Begins.
- QatarEnergy Advises LNG Ships to Avoid Strait Until Cargo Time.
Saudi Arabia, the largest crude oil exporter in the world, exported 7.178 million barrels per day (b/d) in the week ending June 15, marking the highest volume in almost two years, as reported by S&P Global Commodities at Sea (CAS) on June 17. Shipments from Middle East Gulf ports jumped by 24% compared to the previous week, reaching 6.628 million b/d, reports S&P Global.
Strait of Hormuz Remains Critical Despite Israel-Iran Conflict
In light of the Israel-Iran conflict that erupted on June 13, ship operators have stepped up security measures around the Strait of Hormuz, a crucial chokepoint for global energy trade.
QatarEnergy, acknowledging the increasing risks, has advised LNG carriers to stay clear of the Strait until just a day before their planned cargo loading. “Shippers are on high alert to use the Strait of Hormuz after the Israel-Iran conflict began June 13.”
Energy Prices Climb as Market Responds to Geopolitical Tensions
As tensions have ramped up, energy prices have taken a noticeable leap. Platts-assessed Dated Brent saw a 9.3% increase since June 12, hitting $77.47 per barrel on June 18. At the same time, Platts-assessed JKM, which serves as the LNG benchmark for Northeast Asia deliveries, surged by 13% during the same timeframe.
Tanker Traffic Remains Steady Despite Market Fluctuations
Even with the market’s ups and downs, tanker traffic has shown impressive resilience. In the week ending June 15, 324 oil tankers made their way through the Strait of Hormuz, a slight 2% decrease from the previous week, yet still above the four-week average of 319.
“Despite the geopolitical climate, tanker vessel movements in the Strait during the second week of June remained robust compared to recent trends,” the CAS report noted.
Saudi Arabia Boosts Output to Meet May Demand
According to the latest Platts OPEC+ Survey, Saudi Arabia increased output by 170,000 b/d in May, raising production to 9.14 million b/d—the highest since its 1 million b/d unilateral cut in June 2023. “The additional crude was used domestically amid soaring temperatures and preparations for the Hajj.”
Strait Carries Nearly 20 Million b/d; Saudi Share at 36%
According to the CAS report, almost 20 million barrels per day of crude oil and refined products (not including LPG) passed through the Strait of Hormuz. Crude oil alone made up 78% of the total outbound volume, with 36% coming from Saudi Arabia.
Market Observes Changes in Tanker Usage and Freight Rates
As of June 15, the average difference between laden and ballast tankers increased to minus 156, up from minus 148 the previous week and minus 138 on June 1. “This suggests that there were fewer laden tankers actively transporting cargo relative to ballast tankers,” the report explained.
Freight rates have taken a leap, leading some operators to hold off on their deployments, hoping for better earnings down the line. On June 17, the Arab Gulf–Far East VLCC route was pegged at w70.5, a jump from w47.5 on June 13, before settling a bit to w68 on June 18. In the Strait, total ship traffic saw a 4% rise from the week ending June 8 to the week ending June 15, primarily fueled by a 16% boost in LPG carrier activity.
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Source: S&P Global
