Hormuz Oil-Tanker Shuttling Trade Is Picking Up Again After Lull

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Or sign-in if you have an account.i(b40u1ikbscdrg1yet6zvug_media_dl_1.png ICE Futures Europe(Bloomberg) — The oil-shuttling service that has been crucial to getting cargoes out of the Strait of Hormuz has picked up again after a recent lull, helping millions of barrels escape as Middle East hostilities escalate.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe shuttling emerged at the height of the war and has been a lifeline for some producers. They use vessels to ferry supplies — often with transponders off to avoid detection — out of the Persian Gulf onto other ships outside the waterway, which then travel on to buyers around the world. While flows through Hormuz remain below pre-war levels, the barrels that have left have been key to alleviating some of the worst fears of an oil-price spike. After a pullback in shuttling earlier this month as a ceasefire unraveled and vessels were attacked, the shuttling trade has rebounded in recent days.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAt least two shippers involved in moving barrels through the strait are ferrying volumes close to levels prior to the escalation in hostilities that pushed oil back to $100 a barrel last week, two people with direct knowledge of the matter said, asking not to be identified due to the sensitivity of the matter. At times prior to June’s interim peace deal, anywhere between 4 million and 7 million barrels a day crossed Hormuz, based on estimates from banks and Washington.While the exact amount crossing Hormuz isn’t clear, there’s anecdotal evidence of a pickup in flows. Buyers of oil that originates within the Gulf have begun to receive deliveries that had been delayed, according to other people familiar with the matter who also asked not to be identified.Satellite data also suggest more ships are leaving. At least seven pairs of ships, four of which are the same length as supertankers that can collectively haul 8 million barrels, were seen conducting ship-to-ship transfers near the Omani port of Sohar on Thursday, according to images from the European Union’s Sentinel-1 satellite. Images from that satellite don’t clearly show vessel types, and ships other than tankers can conduct cargo transfers.That compares with only two pairs on July 21. At that time, some shuttle flows had slowed as a result of intense fire between the US and Iran. Multiple transfers also took place further north in the Gulf of Oman at Fujairah earlier this week, Sentinel data show. Producers have made use of shuttle runs to get their barrels through Hormuz as many shipowners remain reluctant to transit the waterway. Instead, regional suppliers are either using their own vessels, or agreeing fixed-length contracts to carry barrels, guaranteeing they can get oil to the market.It’s unclear how fresh fighting across the region this week will impact shipments. Brent crude futures slipped toward $80 on Tuesday amid signs of deescalation, only to rebound after an attack on a military base in Jordan prompted the US to retaliate.The transits are vital for the global market, as before the war Hormuz carried about a fifth of global oil volumes, or about 20 million barrels a day. Still, satellite data show that oil loadings are subdued in some countries compared with pre-war levels.US Energy Secretary Chris Wright said Wednesday that the US military continues to escort barrels through Hormuz, and that about 13 million barrels a day are leaving the Gulf — half through the strait and half via bypass pipelines. US Central Command said on Wednesday that since early May, the US has helped about 500 million barrels of oil leave Hormuz, which would suggest roughly 5.6 million barrels a day since over the period.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.In another sign that sizable flows have resumed, people familiar with the matter said that at least two oil companies have collected shipments outside Hormuz that crossed the waterway in recent days, and which were meant to have been picked up weeks ago.Those barrels are mainly supplies from the United Arab Emirates, bought in earlier tenders issued by Abu Dhabi National Oil Co. for its offshore varieties. The delays led to some buyers incurring fees for ships they hired to pick up the cargoes that took longer than expected to arrive, the people said. Adnoc’s shipping arm booked a fuel tanker to pick up a cargo from a ship-to-ship transfer near Sohar in the coming days and take it to Asia, fixture data show, another indication of shuttle flows being underway.“We do not comment on the position, movements, or routing of our vessels as a matter of policy,” a spokesperson for Adnoc said.Other countries in the region have also engaged in shuttling barrels out of the Persian Gulf since the war began. Some of the shipments leaving the waterway sail direct to buyers after crossing Hormuz, rather than engaging in the shuttle service.Tracking exact flows is complicated, especially as vessels often sail dark with transponders off. But at one point after the US-Iran ceasefire in June, 18 million barrels crossed in a single day, an amount boosted by the outflow of massive volumes that had been trapped in the Gulf when the war broke out.—With assistance from Sarah Chen and Grant Smith.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.