From Bloomberg via The Japan Times, June 18:
An impending wave of oil that’s been trapped inside the Strait of Hormuz is set to be unleashed on Asia, which would suddenly swamp a region that had managed to make up for lost supply in recent weeks.
Around 31 supertankers, capable of carrying about 62 million barrels of crude, are stuck inside the Persian Gulf and set to sail out once the waterway opens up, according to Signal Group data. The actual tally may still be higher yet, with some vessels possibly turning their satellite transponders off.
The gush could happen soon after the U.S. and Iran signed an interim deal that will see the strait reopen. The oil would take about one week to get to India, or three weeks to East Asia.
The crude, however, is coming at a time when refiners in Asia are already well supplied for this month and next after scrambling to replace Middle Eastern flows, according to traders familiar with the matter, who asked not to be named as they’re not authorized to speak publicly. They’d also cut processing rates as high prices curbed demand for fuels.
It’s a stark reversal from the early stages of the war, when prices were spiking and the oil market was warning of dramatic shortages. Refiners locked in purchases from places such as the U.S., while China had largely stayed out of the market, and countries such as Japan tapped local storage.
At the same time, Persian Gulf sellers such as Abu Dhabi National Oil Co. and Kuwait Petroleum Corp. have been marketing supply and getting some of their barrels out of Hormuz. Oil production in Iraq has also jumped and is set to continue climbing.
Already, more tankers are moving out of the Persian Gulf. Three oil supertankers controlled by Bahri, Saudi Arabia’s national shipping company, emerged in the Gulf of Oman on Thursday after last being seen inside the Persian Gulf about two months ago....
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Both Brent and WTI futures are down over 2%.
