Last week, the President Donald Trump claimed a secret US mission moved 100 million barrels of oil through the region Strait of Hormuz while it is blocked. The allegations landed in an industry that is already used to the question of how much oil comes out– and no one, it turns out, can confidently answer that.
“No one has experienced this kind of disruption,” said Matt Stanley, head of market operations at Kpler, a product intelligence and ship tracking company. The reason the numbers are hard to pin down is what the industry calls dark-tool trading run without their AIS transpondersmoving at night, near the Omani border, sometimes with naval escort.
There are ways to detect oil leaks. Different grades of crude can only come from specific fields. The UAE’s Murban crude can be shipped via Fujairah, outside the strait. Another type of crude, Upper Zakum, cannot. One oil market analyst noted that their team has seen Upper Zakum crude oil appearing in other markets. Such events are occurring, but the extent is not yet known.
Stanley says it is possible that 100 million barrels have crossed the Strait of Hormuz since the first of May. “When you put it into context, before the crisis, it was about 20 million barrels a day that was flowing, so five days’ worth of oil, in normal traffic conditions, and it’s taken over a month. 100 million barrels, it’s a good number, but it’s a small amount of water in the sea, literally, compared to the previous traffic.”
Why Prices Haven’t Exploded Yet
The world’s largest oil terminal has been closed for more than 100 days. World Trade Organization figures show a 95 percent drop in crude oil shipments from Arabian Gulf ports and a 99 percent drop in natural gas carriers. The International Energy Agency has he called it “the biggest disruption in the history of the world oil market.” Still, Brent crude sits at $87.55 a barrel—the lowest level since before the crisis began.
This is because of buffers. China has about 1.3 billion barrels in storage, drawing about a million barrels a day, Stanley says. “We see their demand, about 7 million barrels per day from May, June, and July. They were buying 12.5 million barrels per day in December.” The United States, Brazil and Canada have also stepped in to fill part of the gap.
The three analysts interviewed agree that the reaction of the oil market has been strong. “The oil market reacted to this outage significantly in terms of cutting parts of demand,” says Iman Nasseri, managing director, Middle East of FGE NexantECA, an energy and chemical consulting firm. “There is also a large amount of stock that has come to the market, but we doubt that they will continue to do so. We expect that by July (if the problem continues to be closed), things will change.”
Saves will run out. One analyst said stocks are approaching what the industry calls operationally critical levels—where oil in storage and excess supply needs to be replenished. They added that the United States, which currently operates as a swing producer, faces its deadline as the end of the year approaches, and the United States will have to prioritize its domestic production to meet the needs of people who need to heat their homes.
“People looking at October, you’d think it would be resolved by mid-August,” Stanley says. “That’s what I think the market expects.”
Go back online
World oil supply it fell 10.1 million barrels per day in March, while OPEC+ production fell by 9.4 million barrels per day month-on-month. The more difficult question is how much returns, and when.
S&P Global CERA analysis estimates restart timelines of 10 weeks to seven months for fields closed for two months. IEA executive director Fatih Birol has said More than 80 power stations have been destroyed, and restoration “could take two years.” The national oil company of the UAE estimates that full flow from Hormuz will not resume until 2027.
