The battle to control shipping through the Strait of Hormuz is heating up, and how the near-term balance shifts will be crucial for oil markets as hopes for a US-Iran deal fade. Tankers continue to risk the voyage and, if anything, the number of clandestine shipments is on the rise despite continued Iranian attacks.
The transits support oil balances, but the IEA warned this week that global observed oil inventories still declined by 69mn barrels (2.2 mn b/d) in July. Until there is a normalization of traffic through the Strait of Hormuz and the Bab al-Mandeb, inventories will continue their inexorable decline, raising the risk of severe products shortages. (CONTINUED - 1027 WORDS)
