Kuwait and Qatar – two of the Persian Gulf’s smaller oil producers – are sending more crude through the Strait of Hormuz, adding to an increase in shipments that are keeping global prices in check.
The two countries, which exported a combined 2 million barrels a day of oil before the outbreak of the Iran war, have managed to get shipments back to 70 percent of pre-conflict levels, according to traders, who asked not to be named as they’re not allowed to speak to media.
The United Arab Emirates was the first gulf producer to export large volumes of oil through Hormuz, using ship transfers in the Gulf of Oman in a tactic known as shuttling. It has since been joined by Saudi Arabia, which has been forced to rely more on exporting through the waterway after Houthi militants started targeting tankers in the Red Sea.
A total of around 7 to 8 million barrels of oil a day is now exiting Hormuz, up from around 4 million barrels a day in mid-July, the traders said. That’s around three-quarters of pre-war levels. Vortexa said on Monday that the seven-day average of oil flows through the waterway was close to 10 million barrels a day.
The increasing volumes come as Washington and Tehran remain in a stalemate over the Iran war, with control of Hormuz the main point of contention. Global benchmark Brent oil is trading near $87 a barrel, down from above $120 in late April.
Qatar and Kuwait began shuttling cargoes through Hormuz around June, and have ramped up volumes despite the risk of Iranian attacks. A Kuwait Petroleum Corp. supertanker was struck earlier in August as it was transiting the chokepoint, the country said in representations to the UN’s shipping watchdog.
QatarEnergy, meanwhile, offered this week to sell its crude on a ship-to-ship transfer basis outside Hormuz in the Gulf of Oman.
KPC and QatarEnergy didn’t respond to requests for comment. Several phone calls to Kuwait’s oil ministry went unanswered.
The so-called shuttle trade has evolved because few vessels are willing to take the risk of transiting Hormuz. As a result, gulf producers have either used their own fleets or hired the tankers that will risk a crossing at exorbitant rates to get cargoes through the waterway and then transfer them onto other ships.
Kuwait – which has a fleet of 11 supertankers, according to the Equasis shipping database – has mostly used its own vessels. The majority of those very large crude carriers haven’t issued any satellite signals for more than two months, ship-tracking platforms show, suggesting they have turned their transponders off, or gone dark.
The country’s success in getting oil through Hormuz means it has been able to offer cargoes on the spot market, the traders said. Those volumes are in addition to what it had committed to long-term customers in East Asia, they said.
Qatar’s oil has generally been carried by the commercial tanker fleet, the traders said. TotalEnergies SE said this week it was one of the biggest carriers of Qatari barrels.
source: Rigzone.com