Hormuz Strait Blocked for Half a Month: Middle Eastern Oil Daily Exports Plummet 60%, Red Sea Route Struggles to Fill the Gap

Questioning AI: Does the surge in floating storage mean an intensifying imbalance between oil supply and demand?

Cailian Press, March 18 (Editor: Liu Jingyi) Recent estimates show that during the week ending March 15, due to regional conflicts causing shipping disruptions and supply interruptions, daily oil exports from the Middle East decreased by approximately 61% compared to February.

The Strait of Hormuz, which originally accounts for about one-fifth of global oil transportation, has been effectively blocked, forcing many exporters to cancel shipments and shut down oil fields, resulting in the most severe supply disruption in history. Crude oil prices have soared to nearly four-year highs, with some fuel prices reaching record levels.

According to Kpler, a global commodities market monitoring company, for the week ending March 15 (last week), oil, condensate, and refined fuel exports from eight Middle Eastern countries—Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Bahrain, and the UAE—averaged 9.71 million barrels per day, down 61% from 25.13 million barrels per day in February.

Kpler reports that before the conflict, these eight countries accounted for 36% of the global seaborne oil exports of 70.43 million barrels per day. The company notes that actual export volumes may be even lower, as some crude is stored in floating storage facilities rather than truly leaving the Gulf region for international markets.

Kpler analyst Johannes Rauball stated that this week, Middle Eastern crude floating storage exceeded 50 million barrels, a significant increase from around 10 million barrels before the conflict.

Data from Vortexa, a company tracking and analyzing energy data, shows a more dramatic decline, with exports from the eight Middle Eastern countries dropping to 7.5 million barrels per day last week, a 71% decrease from 26.1 million barrels per day in February.

Currently operational oil transportation routes include exports from Saudi Arabia’s Yanbu port on the Red Sea, Oman’s maritime exports, and the UAE’s Fujeirah port. However, Fujeirah’s loading operations have been repeatedly interrupted in recent days due to drone attacks.

Earlier shipping data revealed that Saudi Arabia’s oil shipments through the Red Sea in March hit a record high but still fell far short of the volume transported through the Strait of Hormuz.

LSEG data shows that in the first nine days of March, the average loading volume at Saudi Yanbu port on the Red Sea was 2.2 million barrels per day, more than double February’s 1.1 million barrels per day. Additionally, LSEG estimates that 37 oil tankers will be loading at Yanbu in March, with 11 already departed.

Kpler estimates that at least 40 oil tankers will be loading in March, potentially pushing oil exports above 4 million barrels per day.

Media calculations indicate that the UAE, which previously produced about 3.4 million barrels per day, has now reduced its crude output by over half. Similarly, Saudi Arabia has cut production by 20%, and Iraq by about 70%. Analysts estimate that total oil production cuts in the Middle East amount to 7-10 million barrels per day.

As global oil reserves dwindle and major Middle Eastern oil producers continue to reduce output due to occasional attacks by Iran, the total oil volume passing through the Strait of Hormuz is only a fraction of normal levels, and the global oil supply faces an unprecedented crisis.

(Cailian Press, Liu Jingyi)