Iran Rushing to Export Oil Following Israeli Attacks

Iran has hiked its daily oil exports by 44% since the first Israeli attack on the Islamic Republic on Friday, as Tehran appears to aim to ship out as much crude as possible amid escalating hostilities.

Since June 13, the start of the Israeli offensive against Iranian nuclear sites and military leadership, Iran has exported on average 2.33 million barrels per day (bpd), according to data from vessel-tracking firm TankerTrackers.com cited by Bloomberg.

The average since last Friday is a 44% surge in average shipments out of Iran compared to the 12 months to June 12.

“They’re trying to get out as many barrels they can but with safety as their number one priority,” TankerTrackers co-founder Samir Madani told Bloomberg, commenting on Iran’s oil shipment strategy of the past few days.

Despite persistent fears of disruption to Middle Eastern oil and LNG supply, there hasn’t been any sign yet that vital export infrastructure in Iran has been targeted.

Iran’s Kharg Island in the Persian Gulf is a major crude terminal and trade hub handling 90% of Iranian crude oil exports which then pass through the Strait of Hormuz, the world’s most critical oil flow chokepoint.

As the conflict doesn’t seem to abate, oil supply from the Middle East could become vulnerable if the two sides decide to attack vital energy infrastructure in the region, analysts at RBC Capital Markets said in a note earlier this week.

The oil market’s biggest fear—the closure of the Strait of Hormuz—appears a distant prospect for now, analysts say, although they acknowledge that if oil flows are disrupted in the Strait, prices could easily hit US$100 per barrel.

A significant disruption to almost a third of global seaborne oil trade moving through the Strait of Hormuz would be enough to push oil prices to US$120 per barrel, ING strategists Warren Patterson and Ewa Manthey said on Wednesday. - Oil Price