The number of commodity vessels observed to have transited the Strait of Hormuz crumbled to single digits this weekend, and risks to supply from the Middle East soared after Saudi Arabia shut down the key East-West pipeline it uses to ship crude from the Red Sea to bypass Hormuz.
The number of commodity vessels that crossed the Strait of Hormuz in either direction was 14 over the weekend, or single digits per day, compared to a 10-day average of 14 commodity ships that moved outbound or inbound in the Persian Gulf, according to preliminary vessel-tracking data compiled by Reuters.
On Saturday and Sunday, only four commodity vessels moved out of the Persian Gulf, including a Suezmax carrying crude or condensate, according to the data. Ten ships moved inbound, mostly carrying bulk commodities, dry bulk cargo, and metals.
The tracking excludes any movements of ships that have switched off their positioning systems to avoid detection or becoming targets of attacks.
Owners and energy exporters are becoming increasingly careful navigating through the Strait of Hormuz amid re-escalation of hostilities this month, including strikes on tankers, and the threat from the Iran-aligned Houthis in the Red Sea, targeting Saudi shipments.
Saudi oil exports just became even more vulnerable to the hostilities after the East-West pipeline, through which the world’s biggest crude oil exporter has been bypassing the Strait of Hormuz with exports out of the Red Sea port of Yanbu, was shut down this weekend.
Saudi Arabia said the shutdown is a precautionary move following the attack on the pipeline on Thursday with drones launched from Iraq in a province close to Iran.
The new risk to Middle East oil supply – specifically, supply that doesn’t depend on the Strait of Hormuz – sent oil prices rallying early on Monday in Asian trade, with Brent hitting $108 per barrel and WTI Crude jumping to $103.
By Tsvetana Paraskova for Oilprice.com
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