With the Strait of Hormuz, through which 25% of the world's seaborne crude oil passes, effectively sealed by the Iran war, "ghost oil shipping" is being cited as a reason global oil prices have not surged to the worst levels.
On the 9th (local time), CNN reported in a story titled "Oil leaking out of the Strait of Hormuz" that "crude futures have not spiked to the dangerous levels experts feared," adding, "One hypothesis is that far more oil than expected is slipping through the Strait of Hormuz's 'double blockade.'"
In fact, global oil prices have shown some stabilization recently. According to Reuters, Brent crude futures, the global benchmark, ended the day at $91.45 a barrel, down 2.97% from the prior session. That is much higher than the roughly $70 level before the war, but well below the recent peak of $114 a barrel.
Analysts say more oil than expected is getting out through the Strait of Hormuz. According to JPMorgan, roughly 2.1 million barrels per day slipped covertly through the strait in the last two weeks of last month. Considering that an average of 15.6 million barrels per day passed through before the war, the scale is limited, but compared with the early days of the war, some oil shipments have resumed.
Experts said it is highly likely tankers are turning off transponders to avoid detection and are bypassing the blockade. U.S. investment bank (IB) Piper Sandler estimated that, including vessels that appeared to pay tolls to Iran-related entities, so-called "ghost voyages" moved about 2.9 million barrels per day through the Strait of Hormuz last month.
Natasha Kaneva, JPMorgan's head of global commodities strategy, said in a client note last week, "Despite the ongoing maritime blockade and a sharp drop in commercial shipping, a remarkable volume of crude and refined products still appears to be passing through the strait."
Bob McNally, founder of energy consultancy Rapidan Energy Group, also said such covert outflows may have delayed or partially eased the crisis. "We assume flows through the Strait of Hormuz are 0%–10% of prewar levels, but when you factor in these outflows, the actual volume could be a bit higher," McNally said.
In addition, shipments through the East-West Pipeline connecting Saudi oil fields to the Red Sea port of Yanbu, and releases from countries' strategic reserves, are also seen supporting price stability. China, one of the world's largest energy consumers, is likewise tapping large stockpiles instead of increasing crude imports, CNN said.
Still, many note these approaches have limits in solving fundamental supply chain issues. Jan Stuart, global energy economist at Piper Sandler, said, "The situation will get worse," forecasting Brent at an average of $130 a barrel in July–August.
JPMorgan estimates ship traffic through the Strait of Hormuz is currently only about 15% of prewar levels. Moreover, as the United States and Iran trade retaliation following the Apache helicopter crash in the strait, observers say a full reopening is becoming increasingly unlikely.