Ahead of the formal signing of the US-Iran peace deal on Friday, Brent crude futures briefly fell below $80 a barrel, as traders priced a quicker pace of supply flows that could normalize in the Gulf area as the Strait of Hormuz moves toward reopening.
That is welcome news on the US inflation front, with lower crude prices helping ease pressure across gasoline, diesel, freight, and other input costs. Back in the Gulf region, early maritime signals suggest commercial vessels are reversing course and heading toward the Hormuz maritime chokepoint in anticipation of a reopening.
Bloomberg reports that two tankers, the Suezmax Kapodistrias 21 and the VLCC Coslucky Lake, both switched destinations and made abrupt U-turns, heading toward major energy terminals in the Gulf.
Most shipowners remain very cautious about an interim peace deal to resolve the Hormuz disruption, but early movers are trying to capitalize on high freight rates while a risk premium remains attached to any Hormuz transit.
According to Kpler data, 60 supertankers are waiting near the Gulf of Oman, up from just 36 earlier this month. There are also 150 ballasting tankers in that area.
On Tuesday, Bloomberg reported that QatarEnergy is preparing to restart LNG flows at the Laffan complex, which exported almost 20% of global supply last year, at 50% capacity within one month and about 80% within two months - well ahead of earlier timelines. Still, full capacity at the LNG facility could take several years to restore due to war-related damage.
UBS energy research analyst Henri Patricot provided clients with the latest Hormuz flows (up to Sunday):
Oil & gas tankers passing through the Strait of Hormuz, in number of ships entering and exiting the Gulf
Oil & gas tankers exiting the Gulf via the Strait of Hormuz, in number of ships
Oil & gas tankers entering the Gulf via the Strait of Hormuz, in number of ships
Estimated oil and gas flows exiting the Gulf, based on DWT, in Mboe/d
Oil and products transit via Strait of Hormuz by destination (Mb/d)
Weekly average crude loadings in the Middle East by port location (Mb/d)
Weekly average oil flows via Hormuz + unidentified exports from Gulf of Oman (Mb/d)
Iran's crude loadings by port (Mb/d)
If the formal signing of the US-Iran peace deal occurs on Friday, tanker throughput through the Hormuz chokepoint could surge as soon as next week, if not shortly after, as shipowners reposition tankers and energy flows begin normalizing through the world's most important maritime chokepoint. However, energy flow normalization will take many months.
Professional subscribers can read much more on the energy shock and Hormuz at our new Marketdesk.ai portal.