Citigroup: Oil prices could fall to $60 a barrel as the Strait of Hormuz crisis subsides.
Related
Sources indicate that Saudi Arabia plans to expand its oil pipeline along the Red Sea, bypassing the Strait of Hormuz and increasing its daily transport capacity by 2 million barrels.
According to five sources familiar with the Odaily, Saudi Arabia is considering expanding the capacity of its crude oil pipeline to the west coast of the Red Sea, enabling Saudi Arabia and its neighbors to transport more oil without passing through the Strait of Hormuz. Built in the early 1980s, this east-west pipeline has become increasingly strategically important since the outbreak of the Iran-Iraq War in February and the disruption of shipping through the Strait of Hormuz. The pipeline can transport up to 7 million barrels of crude oil per day to the Red Sea port of Yanbu. In May, the CEO of Saudi Aramco stated that approximately 2 million barrels would supply refineries on the west coast, and about 5 million barrels would be exported. Sources say that Saudi Arabia is in preliminary discussions with some neighboring countries regarding pipeline expansion, planning to add approximately 2 million barrels of pipeline capacity per day. It is unclear whether Aramco's planned expansion involves upgrading existing infrastructure or building a new pipeline. One source said the expansion plan also includes a smaller refined oil pipeline. Two sources said the expansion could be between 1 million and 2 million barrels per day, with refined oil products also under consideration. Another source indicated that the project would take several years, cost billions of dollars, and require adjustments to Saudi Arabia's crude oil pricing mechanism. (Jinshi)
Shipping data: At least five very large crude carriers (VLCCs) loaded with crude oil from Saudi Arabia have sailed out of the Strait of Hormuz.
According to trade sources and shipping data, at least five very large crude carriers (Odaily) have loaded a total of 10 million barrels of Saudi crude oil from Saudi Arabia's Ras Tanura port and have sailed out of the Strait of Hormuz. (Jinshi)
Iraqi Revolutionary Guard takes action against oil tanker in waters off the Omani side of the Strait of Hormuz.
According to CCTV, Odaily Odaily reports that on the 7th local time, Iranian sources stated that the Iranian Islamic Revolutionary Guard Corps took action against an oil tanker in the waters off the Omani side of the Strait of Hormuz. The report also stated that, according to satellite monitoring data, US air power was providing air cover in the relevant waters when the tanker was intercepted.
Saudi Arabia drastically cut crude oil prices, with the largest drop in at least 26 years.
Odaily Odaily reports that Saudi Arabia has cut its official selling prices for key crude oil grades to Asian customers in August, the largest reduction in at least 26 years, as surging global supply intensifies competition for buyers. According to a price list, Saudi Aramco lowered the price of its Arab Light crude oil exports to Asia by $11 per barrel in August, representing a discount of $1.50 per barrel to the regional benchmark price. This reduction is larger than the $8 per barrel expected in institutional surveys. Middle Eastern crude oil prices have recently declined. After resuming exports from the Rastanura port on the Persian Gulf, Saudi Aramco had increased its crude oil shipments to approximately 90% of pre-war levels. Before the war, Rastanula was Saudi Arabia's main port of call for crude oil exports. Due to the war's blockade of the Strait of Hormuz, Saudi Aramco diverted most of its crude oil to the port of Yanbu on the Red Sea. Previously, the OPEC+ oil-producing group had agreed to continue a small production increase in August. Now, with the resumption of shipping through the Strait of Hormuz, Gulf oil-producing countries such as Saudi Arabia, Iraq, and Kuwait will be able to utilize their higher quotas. (Jinshi)
The US-Iran peace agreement has released a large amount of crude oil supply, reigniting concerns about a global supply glut.
Odaily Odaily reports that with the US-Iran peace agreement releasing a large supply, oil prices have fallen across the board, with demand unable to absorb the impact, reigniting discussions about a crude oil oversupply. This is a stunning reversal; less than three months ago, major global physical crude oil benchmark prices hit record highs; and just weeks ago, senior industry executives were warning that global inventories had fallen to extremely low levels due to the Iranian crisis. In addition to the immediate impact of the reopening of the Strait of Hormuz, analysts from institutions such as Morgan Stanley and Goldman Sachs have warned this week of the risk of a supply glut next year. "The overwhelming sentiment in the market right now is bearish," said Kit Haynes, head of oil research at energy consultancy Energy Aspects. Even before the US and Iran signed a memorandum of understanding in mid-June to reopen the Strait of Hormuz, suppliers in the Persian Gulf were already increasing shipments. In the weeks following the agreement, more than 60 million barrels of crude oil stranded due to the outbreak of war flooded the market. (Jinshi)
Iran warns external countries against creating a crisis in the Strait of Hormuz.
According to BlockBeats, on July 4th, Xinhua News Agency reported that British Prime Minister Keir Starmer and French President Emmanuel Macron issued a joint statement on July 3rd, stating that both countries would cooperate with Oman to ensure the safety of shipping in its sovereign territorial waters. Iranian Deputy Foreign Minister Gharibabadi responded on the 4th, stating that the Strait of Hormuz is not a venue for military displays by external countries, and Iran opposes any military actions that could affect the security of this waterway. As the guarantor of security in the Strait of Hormuz, Iran will remain highly vigilant regarding any related military movements. The security of the Strait of Hormuz should be jointly maintained by the littoral states, and any actions that create a crisis will be subject to the consequences of the parties involved. He also emphasized that the warning was "serious."