Recent data from S&P Global Commodities at Sea reveals a significant drop in Iran’s crude oil exports, as tensions between Iran and Israel escalate.
The last observed crude export cargo from Iran was estimated to have loaded on October 4, with only one other cargo seen since September 29. This sharp decline has resulted in Iran’s crude exports plummeting to 237,000 barrels per day (b/d) in the week ending October 6, marking the lowest weekly total in at least two years.
The export slowdown comes in the wake of potential Israeli retaliation against Iran’s key oil infrastructure. Normally, Iran ships 7-10 crude cargoes each week, with export flows averaging 1.7 million b/d so far this year, up from 1.1 million b/d in 2022. The current situation has raised concerns about the stability of Middle Eastern oil supplies.
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Satellite images circulated on social media on October 3 appeared to show tankers leaving Kharg Island, Iran’s primary crude terminal responsible for handling about 90% of its exports. Traders speculated that Iran was moving unladen tankers away from Kharg Island to avoid potential damage from an Israeli strike. However, exports from the island may have resumed, with a 657,000-barrel cargo of Iranian crude reportedly lifted there on October 4.
Data from Goldman Sachs show that crude exports had dropped to zero as the threat of imminent attack intensifies.
The geopolitical tensions have caused fluctuations in oil prices, with Brent oil futures briefly surpassing $80/b on October 7 before falling to $77.25/b on October 8. Market watchers are closely monitoring the situation, with some speculating that oil prices could surge over $100/b if Iran attempts to disrupt shipping through the Strait of Hormuz.
Despite these concerns, most analysts believe that a major supply disruption remains unlikely. OPEC, particularly Saudi Arabia and the UAE, is estimated to have around 6 million b/d of spare production capacity, which could potentially offset any losses from Iran.
Information for this story was found via S&P Global, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
