Don't mistake Mideast oil rebound for normality: Bousso
USO•Middle East oil exports averaged 17.3 million barrels per day in October, above pre-war levels, while Brent climbed to around $110 a barrel. Tanker rates and insurance costs remain far above pre-war levels, as attacks and fears of renewed escalation persist.
1. Exports recover, risks persist
Middle East oil exports averaged 17.3 million barrels per day so far in October, up from 16.4 million in September and above the 16.9 million average in the two months before US-Israeli strikes on Iran began on February 28. Strait of Hormuz flows reached 11.7 million barrels per day, around 82% of pre-war levels, while the United Kingdom Maritime Trade Operations reported 12 attacks in or around the strait last week.
2. Shipping remains costly
A tanker carrying 2 million barrels of crude from the Middle East to China costs around $1.4 million a day to charter, more than 12 times pre-war levels. Tanker insurance is around 10% of cargo value, up from roughly 3%. Saudi Arabia’s Red Sea exports averaged 3 million barrels per day in October after an attack on a pipeline linking its eastern oilfields with its western coast disrupted flows.
3. Prices reflect escalation fears
Brent rose to around $110 a barrel, its highest level since May, even as global crude aboard tankers reached around 157 million barrels on a four-week average. Daily trading in ICE Brent options hit a record of more than 1 million lots on Tuesday. The article says the price and trading moves suggest market participants are concerned about whether exports can continue if fighting intensifies.
