The biggest oil producers in the Middle East are asking their Asian customers to submit cargo loading nominations for the export ports that require passage through the Strait of Hormuz, in a sign that the Gulf petrostates are taking tentative steps toward preparing for resumed oil flows through the chokepoint.
Saudi Arabia, Kuwait, and Iraq are asking for loading nominations for April and May for cargoes that would have to eventually transit the Strait of Hormuz, sources familiar with the plans told Reuters on Friday.
Despite the ceasefire announced on Tuesday night, traffic at the Strait of Hormuz, the only export route for Iraqi and Kuwaiti oil and a large part of Saudi Arabia’s oil, hasn’t materially picked up.
“The ceasefire has not reopened the Strait of Hormuz, and transit remains tightly controlled,” maritime intelligence firm Windward said on Thursday.
“Transit through the Strait of Hormuz remains restricted, coordinated, and selectively enforced,” the firm said, noting that “There has been no return to open commercial navigation.”
Still, Saudi oil giant Aramco, the world’s top crude exporter, has asked customers to submit loadings nominations for May from both Yanbu on the Red Sea and the Ras Tanura port, according to Reuters’ sources. Cargoes departing from Ras Tanura need to pass through the Strait of Hormuz.
Last month, Saudi Arabia moved to boost its exports from Yanbu on the Red Sea which doesn’t require passing through the Strait of Hormuz, as Ras Tanura exports were trapped in the Persian Gulf.
Despite the pivot to Yanbu, Saudi Arabia cannot fully offset the loss of all the supply it was shipping through the Strait of Hormuz before the war.
Aramco last month notified customers of term supply in Asia that they would receive in April only the flagship Arab Light grade loaded at Yanbu.
Iraq, which has been reportedly allowed by Iran to move its vessels through the Strait of Hormuz, had already asked clients to submit loading schedules even before the ceasefire was announced.
Since the ceasefire was announced, some traders and refiners have booked tankers to travel to the Middle East to pick up crude, but the shipping industry remains on high alert amid few details how, when, and if at all passage would be granted. As of Friday, Iran remains in control of the Strait of Hormuz.
By Tsvetana Paraskova for Oilprice.com
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