Only two ships crossed Hormuz on Friday as more tankers switched off transponders for days; Asian refiners responded to stranded Middle Eastern barrels by buying US crude.
Economics & Markets··Night
Traffic through the strait fell to two ships
Visible traffic through the Strait of Hormuz fell far below its usual scale on Friday. Only 2 vessels crossed during the day and there were no visible crude loadings, compared with a pre-war daily average above 130 ships. That sharp contraction coincided with crude futures rising 1 dollar a barrel. Brent was heading for a 6.0 per cent weekly gain and West Texas Intermediate for 5.4 per cent, while US gasoline averaged 4.08 dollars a gallon, 29 per cent above its level a year earlier. On the same day, the United Arab Emirates accused Iran of attacking an ADNOC vessel transiting the strait, while 6 ballistic missiles fired by Houthi forces at Yemen’s Mocha port killed 4 civilians. The contraction in oil traffic, the maritime security incidents and higher fuel costs landed in the same day’s market picture.[1]
Tankers went silent for days
The number of tankers sailing with transponders switched off is increasing at Hormuz and Bab el-Mandeb. Ship-tracking data monitored by Bloomberg show that at these 2 critical Middle Eastern chokepoints, silence that once lasted a few hours now extends for a week and sometimes longer. At Bab el-Mandeb, Houthi forces are targeting Saudi-linked ships and oil cargoes leaving the Red Sea port of Yanbu. At the end of July, the supertanker Romania Prosperity disappeared from radar off Fujairah in the Gulf of Oman and reappeared nearby 10 days later. Tracking services could not establish whether it still carried the same cargo. As transponder-off sailing increases, counts based only on ships with active signals are also more likely to understate total movement. Alternatively, part of the decline in visible transits may reflect fewer tankers actually setting out; the available data do not fully separate the two effects. Refiners must both find crude and track cargoes capable of arriving on schedule.[3], [1]
Asian refiners turned to US crude
Refiners in North Asia increased purchases of US crude to replace Middle Eastern barrels unable to leave through Hormuz. Traders told Reuters that at least 4 Asia-based refiners bought US cargoes in this week alone. As transits by tankers with active positioning signals fell further, tight fuel markets and high refining margins encouraged plants to keep running. A transaction by South Korea’s GS Caltex shows the cost of the new route: the company bought 2 million barrels of Mars crude from Shell for November delivery at a premium of 13 to 14 dollars over the October Dubai benchmark. That purchase answers the same supply pressure visible when only 2 ships crossed Hormuz on Friday and no crude loadings could be seen. Refiners are reaching for a more distant source to protect production, while also paying more above the regional benchmark. The result is a concrete shift in both origin and delivery route: as the usual exit from the Middle East remains obstructed, US barrels are becoming substitute cargoes for North Asia. Hormuz transits and tankers switching off transponders may be among the factors steering North Asian refiners toward US replacement cargoes. However, tight fuel markets and high refining margins could also explain the US purchases; the sources do not separate the weight of those factors.[1], [2], [3]
