Gulf Oil Exports Rebound to Prewar Levels, Despite Iranian Attacks
Oil exports from the Gulf states have climbed back to approximately prewar volumes despite Iran's attempts to close the Strait of Hormuz, with Kpler assessing that volumes exiting the Gulf by tanker and pipeline averaged 16.5 million barrels per day in September. Saudi crude export volume reached 6.4 million bpd last week, above prewar averages, while Iraqi exporters are absorbing shipping costs by selling crude at up to $37 per barrel below benchmark pricing. LNG, urea, ammonia, sulfur and refined products are not getting through the strait at prewar levels, and U.S. bulk diesel pricing rose to a record, with the average retail diesel price at $6.53 per gallon.
Why it matters: The divergence between recovered crude flows and commodities such as LNG, urea, ammonia, sulfur and refined products that remain below prewar levels bears on energy security, since constrained refinery capacity and record diesel prices indicate the increased Gulf oil flow may not immediately relieve fuel supply-side pressure.