‘Hormuz Flows Remain Low,’ Says Goldman — What It Means for Oil Markets

Shipping through the Strait of Hormuz remains sharply reduced as tensions in the region disrupt global oil trade and push prices higher. The strait is the world’s most critical oil route, carrying about 20% of global crude supply, so any disruption can quickly tighten supply and drive oil prices up.

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At the time of writing, the price of the global oil benchmark Brent (CM:BZ) was up about 1.61% to $104.8 a barrel, while West Texas Intermediate (WTI) crude (CM:CL) rose more than 0.87% to trade at $99.57 per barrel.

Goldman Sachs Data Shows Sharp Drop in Hormuz Oil Flows

According to analysts at Goldman Sachs GS -0.67% ▼ , recent vessel tracking data shows that oil flows through the strait have dropped sharply in recent days. Based on tanker counts, flows fell by about 19.5 million barrels per day, leaving only around 0.5 million barrels per day moving through the route on a four-day average basis.

The disruption appears severe. Goldman’s tracking sources showed no oil tankers crossing the Strait of Hormuz on March 12, highlighting how much traffic through one of the world’s most important oil routes has slowed.

Even after accounting for oil redirected through pipelines from the Persian Gulf, Goldman estimates the net loss in exports is still about 17.2 million barrels per day.

There are, however, early signs that some shipments may still be getting through. Reports cited by the bank said Iran allowed two Indian-flagged LPG carriers to pass through the strait, with one vessel reportedly escorted by the Indian Navy. This could suggest that Tehran is allowing limited passage for certain ships, particularly those linked to Asian buyers.

For now, the bank expects oil flows to gradually return over about 30 days starting around March 21. However, analysts said the recovery could take longer than expected, as the risks still point more toward delays than a quicker improvement.

What This Means for Oil Markets

The disruption in the Strait of Hormuz could continue to influence global oil prices in the near term. Goldman Sachs noted that oil can often be rerouted to other buyers, meaning the longer-term impact on prices will depend less on which countries receive the shipments and more on how much total oil from the Persian Gulf reaches global markets.

In other words, oil prices will largely depend on whether exports from the region recover in the coming weeks.

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