Hormuz shuttle trade helped keep Brent between $80 and $90 a barrel in August, according to a Bloomberg account cited by InvestingLive. The report said Gulf producers moved crude through transfers to tankers waiting off Oman. As a result, oil prices did not test the $150 levels some traders had feared when the Iran war began.
The article said producers have been moving crude out of the Strait of Hormuz by loading barrels onto tankers off Oman’s coast. It added that ships often switched off transponders to avoid attention. According to people familiar with the shipments, volumes ran above the roughly 4 million barrels a day that markets had assumed.
Hormuz Shuttle Trade Off Oman
Satellite data cited in the report showed vessels gathered off Oman rose to about 150 from 40 in January. Meanwhile, US Energy Secretary Chris Wright said last week that 9 million barrels a day crossed Hormuz. The article said that was nearly half of pre-war volumes.
Bloomberg’s account argued that this shipping network acted as an informal supply buffer. Therefore, the market kept a steadier price range despite the war. The report also said stockpile releases, pipeline workarounds and softer global demand supported stability.
Risks and Costs of the Trade
The article said the trade has brought human and environmental costs. It reported that the UAE’s Adnoc had 23 vessels attacked while moving through Hormuz. As a result, one crew member died and 20 others were injured, while Adnoc still sold about 135 million barrels through the route.
The report added that Iraq, Qatar and Kuwait found similar but smaller outlets. It also said satellite images showed oil spills with no clear source. Moreover, the people running the trade described it as a dark trade, and the article said not every ship owner would accept that risk.
Bloomberg’s account said the setup remains fragile. It depends on military tolerance, insurer support and producers taking losses that would be hard to accept in peacetime. Finally, the report said more than a dozen Saudi supertankers were gathering off Oman, which may point to preparations for Saudi Arabia to join the shuttle trade.
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Source: InvestingLive
