Over the weekend, 16 tankers gathered off the coast of Oman to transfer millions of barrels of oil stranded in the Persian Gulf. A month ago, the area was completely empty.
They are part of a growing number of tankers that are turning off their transponders to turn the oil flowing through the Strait of Hormuz from a trickle into a creek. While traditional ship-tracking data shows little change in shipments, senior shipping executives, Asian oil buyers and satellite imagery paint a different picture: There are now far fewer blockades in the Strait of Hormuz, transits are more stable and volumes are larger.
An increase in the number of Gulf producer ships sneaking through undetected by Iran is at the heart of the increase in traffic, even as the United States has been helping ships move through the waterway. Recent trading volumes are further evidence that the oil market is trying to get enough cargo to buyers and avoid a price spike as the war with Iran creates the worst supply disruption in the oil market’s history.
Middle Eastern producers have been using ships they control to ship barrels outside Hormuz to avoid the high fees charged by the few shipowners willing to transit. After leaving, they transfer the oil to tankers and ship the cargo to buyers in Asia and elsewhere.
“We’re seeing an increase in the trend,” said Larry Johnson, head of freight at commodities trader Mercuria Energy Group. “They are primarily or exclusively government-owned vessels that are passing through,” he said, adding that the vessels “seem to have channels of communication and means to somehow ensure safe passage.”
People familiar with the crossings said at least some of the crossings were made under cover of darkness, with the lights on the ships turned off. Staff were also instructed not to use radios, a person familiar with the matter said.
About 2 million barrels of oil and related products are currently flowing out of the Gulf per day, according to Rapidan Energy Group, a level well below normal but much higher than earlier in the conflict. Those flows, combined with a collapse in Chinese purchases, a surge in U.S. exports and solutions such as hundreds of miles of pipelines across the Middle East, have helped oil prices fall nearly 30% from their peak at the height of the war.
The transfer, which departed Oman at the weekend, was identified using satellite imagery from the EU’s Copernicus browser. TankerTrackers.com Inc., which uses satellite imagery to track ships, said it found 12 ships carrying non-Iranian Middle Eastern oil transshipping outside Hormuz on June 6 alone.
“This is oil from Iran’s Arab neighbors,” says TankerTrackers.com. “This is another reason why oil prices are not currently reaching $200 a barrel.”
U.S. President Donald Trump said in a social media post on Wednesday that “a lot of oil is coming out” of Hormuz. A day earlier, U.S. Energy Secretary Chris Wright told a conference that tanker traffic was “increasing significantly.”
The Middle East’s main oil benchmark has steadily fallen to pre-war levels amid the prospect of increased supply. Before the effective blockade of the Strait of Hormuz, it handled about a fifth of the global market’s supply of more than 100 million barrels of oil per day.
Trump vowed on Wednesday to strike again at Iran and accused the country of delaying talks on an interim peace deal after another attack overnight put further pressure on a fragile two-month truce. Trump said he retaliated against Iran for shooting down a U.S. Apache helicopter near Hormuz.
There are other signs of more supply flowing out of the region. In recent days, Kuwait and the United Arab Emirates have both offered to sell oil outside Hormuz, suggesting the oil has passed the choke point. Satellite images show steady ship loading at UAE oil terminals in recent weeks.
Buyers in Asia are generally receiving more offers for oil that is about to leave storage and expect more shipments in the coming days and weeks, according to traders involved in the market who asked not to be named.
At least two supertankers, each capable of transporting 2 million barrels of crude oil, passed through Hormuz late last month and began signaling off the coast of Kuwait.
According to the Equasis maritime database, both tankers are managed by the Kuwait Tanker Company and neither has since sent a signal. An unnamed shipowner also said the company had been contracted to carry oil barrels diverted from Kuwaiti ships transiting Hormuz, while others said they believed Kuwait provided transit services for more than two dozen very large crude carriers.
State-owned Kuwait Petroleum Co. did not immediately respond to a request for comment.
Increased oil flows from Kuwait follow a similar pattern to UAE oil exports. Abu Dhabi National Oil Co. sold at least 14 million barrels of oil in a tender that ended last weekend, Bloomberg reported on Monday. Loading of the cargoes will begin this month.
Abu Dhabi National Oil Co., one of the companies shipping crude oil through the Strait of Hormuz, turned off its transponders to avoid detection, Bloomberg reported last month. The company has continued to move oil across the Taiwan Strait at a healthy pace in recent weeks, according to two people familiar with the company’s operations. They asked not to be named because the information is private.
Satellite images also showed that ships continued to load at some of the country’s main terminals. According to Copernicus data, an oil tanker was seen being loaded on six of the eight days in May when images were taken from Cirku Island. Before the war, the terminal was capable of loading more than 1 million barrels of crude oil and condensate per day, according to intelligence firm Kpler.
Abu Dhabi National Oil Co. did not immediately respond to a request for comment.
Shipping data from late May showed that about a quarter of the large non-Iranian oil tankers trapped in the Persian Gulf had escaped before some recent transits. Georgios Sakellariou, a cargo analyst at ship pool management company Signal Maritime, said about 90 people were still trapped, compared with about 160 in early April.
“Dark Transit traffic has increased,” he said. “The reduction in oil stranded in the Gulf is noticeable, but not enough to return to pre-war levels.”
Photo: An Iranian supertanker. Credit: Jorge Guerrero/AFP/Getty Images
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