Citi said on Thursday that near-term risks to oil prices remain skewed to the upside despite a recovery in Gulf crude exports, as shipping bottlenecks continue to keep delivered supplies tight.
"The normalization of Arab Gulf oil exports has been volumetric rather than logistical, with unprecedented shipping inefficiencies keeping delivered crude costs elevated," Citi said
More than 1 million barrels per day of Gulf crude exports were moved via ship-to-ship transfers in September, equivalent to about 7.5% of regional flows, compared with virtually none before the US-Iran conflict. Citi said the rise underscored the increasingly complex logistics behind the recovery in exports
Gulf oil flows excluding Iran rose to more than 81% of pre-war levels in September, data showed, led by a recovery in Saudi exports despite attacks on the kingdom's oil infrastructure and escalating Iranian attacks on regional shipping. Iranian exports, meanwhile, fell to zero because of a US blockade
Before US-Israeli attacks on Iran began in late February, the Strait of Hormuz handled about one-fifth of global oil and liquefied natural gas supplies
Freight rates for very large crude carriers on the Gulf-China route recently approached $250 per metric ton, or about $35 per barrel, more than 20 times the average level over the previous decade, Citi said
(Reuters)