One week after the United States and Iran signed an interim peace agreement, crude oil exports from the Persian Gulf have rebounded to at least 75% of pre-war levels. However, this may represent only the easier initial step.
According to calculations, over the three days ending Wednesday, the region exported nearly 13 million barrels per day, with a significant portion originating from previously stranded cargoes. Iran and other nations have begun clearing this backlog.
While the current export volume is approximately 40% higher than the average for the first half of June, the larger questions are whether this recovery can be sustained and how many tankers will be willing to return to the Gulf region to restore shipping to a more normal cadence.
It may take several more weeks for the situation to become clearer as the US and Iran continue to finalize the details of their agreement. Furthermore, accurately gauging the true scale of exports since the interim deal remains difficult, as some "dark ships" continue to sail with their location transponders switched off. US officials' estimates of export volumes are significantly higher.
The reopening of the Strait of Hormuz is unlikely to proceed smoothly. A British naval agency reported on Thursday that a vessel in the strait had been attacked by an unidentified flying object. Several hours prior, multiple cargo ships had turned back while attempting to traverse the waterway.
Even accounting for statistical discrepancies in actual shipping traffic, the current recovery indicates a degree of resilience in the Gulf's crude export system. A ship evacuation plan established by the International Maritime Organization could further facilitate the resumption of navigation through the Strait of Hormuz. Meanwhile, Saudi Arabia and the United Arab Emirates continue to utilize emergency pipelines that bypass the strait to transport crude.
However, this surge in exports is primarily fueled by the drawdown of crude inventories that had been held for extended periods on tankers within the Persian Gulf and surrounding waters, rather than from newly produced crude at oil fields and export terminals. For instance, Saudi Arabia is only just beginning to resume operations at its key export terminal, Ras Tanura, while Iraq still struggles to secure sufficient tankers to load its crude.
The true test lies in whether new tankers will return to the Gulf region to load incremental crude. Only then can it be determined if oil exports can genuinely recover to pre-war levels.
As of now, this has not materialized. Since the interim peace agreement was reached, the number of crude-carrying vessels entering the Gulf has been notably lower than the number of tankers departing the region.
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