Citi said on Thursday that near-term risks to oil prices remain skewed to the upside despite a recovery in Gulf crude exports, as shipping bottlenecks continue to keep delivered supplies tight.
* “The normalization of Arab Gulf oil exports has been volumetric rather than logistical, with unprecedented shipping inefficiencies keeping delivered crude costs elevated,” Citi said
* More than 1 million barrels per day of Gulf crude exports were moved via ship-to-ship transfers in September, equivalent to about 7.5% of regional flows, compared with virtually none before the US-Iran conflict. Citi said the rise underscored the increasingly complex logistics behind the recovery in exports
* Gulf oil flows excluding Iran rose to more than 81% of pre-war levels in September, data showed, led by a recovery in Saudi exports despite attacks on the kingdom’s oil infrastructure and escalating Iranian attacks on regional shipping. Iranian exports, meanwhile, fell to zero because of a US blockade
* Before US-Israeli attacks on Iran began in late February, the Strait of Hormuz handled about one-fifth of global oil and liquefied natural gas supplies
* Freight rates for very large crude carriers on the Gulf-China route recently approached $250 per metric ton, or about $35 per barrel, more than 20 times the average level over the previous decade, Citi said
(Reporting by Anushree Mukherjee in Bengaluru. Editing by Mark Potter)