Fast Facts

Baird Maritime photo

 

Global seaborne crude oil shipments have fallen ~16% since the start of the Iran war. We are currently down ~14 million barrels/day out of a total of ~103 total barrels of oil/day used globally. Empty tankers that previously would have picked up oil in the Persian Gulf are now heading to other destinations to pick up oil - including the U.S. These increased exports may potentially go from 4 million barrels/day to 6 million barrels/day. Robbing Peter (U.S. Citizens) to pay Paul (the rest of the World). It takes 22 days to transport oil from Saudi Arabia to Shanghai by sea; versus 52 days to transport oil from Houston to Shanghai by sea. For a Houston-to-China run, we would need to quadruple crew-hours: over twice as many crews to man over twice as many tankers - over twice as long for each voyage. A Houston-to-China run will require more than twice the fuel and twice the wear-and-tear on the ships.

 

We would need over twice as many tankers to transport oil from the U.S. to China. But those tankers do not exist. Oops.

 

I suppose China is going to have to figure this out. But, there again, the Strait of Hormuz is functionally closed anyway; as a consequence of the blockade by both Iran and the United States.

 

At some point in the future (weeks, months, years, whatever), and after a cessation of hostilities, it will take weeks to reposition most all of these ships back to their normal runs. As a follow-up to Sunday's post on the Iran-Trump negotiating situation; it is my opinion that the longer Iran holds out, the greater the international chaos and the stronger Iran's negotiating position becomes. Does Trump's negotiating position becomes weaker? Dunno for sure; but the polling is getting worse with the passage of time.  

Of course, Iran is aware we have a midterm election coming-up.

Who knew a war in the Middle East could be so complicated?

 

 

 

 

Data: U.S. Energy Information Administration - https://www.eia.gov/