Goldman Sachs Warns Strait of Hormuz Traffic May Never Fully Recover
More Than 60 Million Barrels of Oil Ready to Head to Asia as Hormuz Reopens What I Cover Irina Slav has been writing about global energy markets since 2007, covering the oil and gas industry, energy security, commodities, and the… Tanker traffic via the Strait of Hormuz may never fully recover to pre-war levels thanks to alternative routes that oil producers in the Middle East have tapped amid the crisis, Goldman Sachs analysts have warned.
According to them, oil flows from the chokepoint could only recover to 70% of pre-war levels, or 13 million barrels daily.
The recovery could take a little over a month, with that 70% of traffic achieved by the end of July, Bloombergreported, citing the investment bank’s analysts.
They also said full production recovery would take until October.
On Wednesday, the presidents of the United States and Iran bothsigneda hard copy of the preliminary peace deal that should see Iran reopen the Strait of Hormuz in exchange for the United States lifting all sanctions against Tehran, including UN sanctions, and committing $300 billion for the reconstruction of Iran, among other mutual commitments.
Based on recent reports, traffic in Hormuz is already on the rise but remains significantly lower than pre-war levels.
Bloomberg said in its report that visible oil flows via the chokepoint stood at 1.3 million barrels per day, plus another 1.6 million barrels per day going out from the Gulf of Oman on vessels turning off their geolocation devices to avoid detection by the Iranian army.
The closure of the Strait of Hormuz prompted Gulf oil producers to reroute oil flows wherever possible.
For Saudi Arabia, this means ramping up flows via its East-West pipeline to the port of Yanbu on the Red Sea.
Flows along this pipeline now average about 7.5 million barrels daily.
The UAE, meanwhile, has left OPEC and plans to boost both production and export capacity, bypassing the Strait of Hormuz via a new pipeline to be built by next year.
Iraq is considering a considerable boost to oil flows via its pipeline to Turkey in a bid to diversify export channels.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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