Why the Oil Tanker Fleet in the Red Sea Can't Save the Oil Market
The media has sensationalized a seemingly positive story: 30 oil tankers carrying 50 million barrels of Saudi oil are heading to Yanbu Port, aiming to bypass the Hormuz Strait, which is blocked by Iran. It seems that supply will be restored and the market can breathe a sigh of relief. But mathematical calculations tell us otherwise.
Actual Situation
Saudi Arabia can indeed transport up to 5 million barrels per day of oil through the strait - a figure almost equivalent to the amount it previously transported through the dangerous area. Technically, 30 VLCCs (Very Large Crude Carriers) can indeed carry 50 million barrels of oil.
But the problem lies elsewhere. The strait has been closed for six days. During this time, the market supply gap has reached:
Only Saudi oil is short by 32 million barrels; plus Iraq, Kuwait, UAE and other countries, the total shortage is 76 million barrels; in addition, there is a daily shortage of 4.5 million barrels of petroleum products
Bottleneck
In Yanbu Port, there are only three berths available for large oil tankers, VLCCs. Loading oil on a single ship takes 24 to 48 hours. To send away the entire fleet, at least 10 days are needed. This is even under ideal conditions - no breakdowns, delays, or force majeure events.
While the last few oil tankers are still loading oil, the market's supply shortfall will continue to expand - although the rate of growth slows down, it is still increasing.
Main Threat
The Houthi rebels in Yemen, who support Iran, are right here - in the Red Sea. For them, these 30 oil tankers are tempting targets. The risk of being attacked still exists.
Original article: toutiao.com/article/1859479868993548/
Statement: This article represents the views of the author alone.