"Goldman Sachs: Gulf oil exports regain two-thirds of pre-war levels"

Bloomberg reported that oil exports from the Arabian Gulf have recovered to about two-thirds of pre-war levels, limiting the impact of the conflict with Iran on global crude prices, according to Goldman Sachs. Analysts at the bank, including Dan Strain and Yulia Gistkova Greggsby, wrote in a research note that total exports of crude oil and petroleum products from the region rose to between 15 million and 16 million barrels per day, supported by increased transit through the Strait of Hormuz. These levels remain 7 million to 8 million barrels per day below pre-conflict figures, but are significantly higher than the low of 5 million to 6 million barrels per day reached in March. The analysts estimated that oil transiting the Strait of Hormuz alone is close to U.S. officials’ estimates of 8 million to 10 million barrels per day. Goldman Sachs noted that “the rise in unmonitored transit operations conducted by specialized shipping companies, alongside ship-to-ship oil transfers, shows that producers and shipping firms are adapting to the Middle East conflict.” The bank added that increased unmonitored flows could “limit potential rises in crude oil prices even if disruptions in the Middle East persist for longer.” It is sometimes difficult to determine the volume of oil passing through the Strait of Hormuz, as tankers often disable their satellite-based transmission and reception devices—a practice known as “dark shipping” or operating without a signal—to avoid tracking their movements. Traders told Bloomberg that approximately 6 million to 8 million barrels per day of crude oil cross the strait. These exports have helped keep global oil prices under control, after they fell to around $89 per barrel, compared with over $120 in April. Despite large volumes of Arabian Gulf oil flowing out, liquefied natural gas (LNG) and refined fuel flows remain at lower levels. Goldman Sachs concluded: “We still see greater room for natural gas prices in Europe and for deferred petroleum product prices to rise under scenarios of continued disruptions, compared with crude prices.”