First Saudi Supertankers Start Leaving Hormuz After Deal

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(Bloomberg) — Three Saudi supertankers were among a growing list of vessels exiting the Strait of Hormuz in an early sign of rising flows after the US and Iran’s interim peace deal, although some trade groups warned that their members needed more clarity on mines and other practicalities.

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The ships controlled by Saudi Arabia’s Bahri are carrying about six million barrels of Saudi oil, and mark the first Saudi-owned crude tankers to cross the strait since the war began. The three ships switched on their signals in the Gulf of Oman on Thursday, having been stuck inside the Persian Gulf since the start of the conflict. 

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There were other signs of movement, although visible traffic still remains extremely light compared with prewar levels. A fourth supertanker carrying oil from the United Arab Emirates, a ship carrying Qatari liquefied natural gas and a Chinese fuel tanker were seen crossing the strait with their signals on, while a second LNG tanker appeared off Qatar after last signaling outside the strait. 

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Speaking privately, a major western tanker owner said that they expected their ships that had been stuck inside the Gulf would leave through Hormuz shortly. 

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The Saudi tankers are significant because Bahri is one of the shippers that has taken a conservative approach, even as a growing number of more risk-tolerant owners moved tankers through the strait under cover of darkness. Saudi Arabia is usually the world’s biggest crude exporter, and has managed to keep selling significant volumes by rerouting oil via pipeline to the Red Sea. 

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The coming days will prove a crucial test after Iran committed to facilitate the return of traffic levels through the Strait to prewar levels within 30 days. The near-closure of the waterway sent energy prices spiking early in the conflict, although markets had retreated even before the peace deal as China reduced its imports, US exports surged, and a growing number of tankers began sailing quietly through the strait. 

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The journeys could mark the first step of a wider reopening of Hormuz, which if sustained would allow gulf producers to restart output that has been shut since early March. In recent weeks, millions of barrels a day had already been transiting dark prior to the signing of the deal and Thursday’s increase in flows will mean that even more barrels from more than 100 stranded tankers inside the gulf are now gushing to markets.

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However, some parts of the shipping and oil industries remained cautious on Thursday, warning that it’s still not clear how traffic would be managed and when or how any mines in the strait would be cleared. While both sides have said that the waterway would be fully opened without tolls for the 60 days covered in the memorandum of understanding between the US and Iran, Tehran has repeatedly indicated its intention to retain some level of management over the strait. 

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The MoU, while welcome, doesn’t offer shipowners and their insurers the full assurance needed to restore traffic through Hormuz, according to the Lloyd’s Market Association, which represents managing agents at Lloyd’s of London.