Rory Johnston
@Rory_Johnston · Energy, economy & shipping
Rory Johnston is an oil-market researcher and former bank economist.
But by far the most interesting piece of data in this report is a direct communication from Saudi Arabia stuffed in a footnote—Saudi crude **production** cratered through August to the lowest level since 1990. The “official” numbers reflect Saudi “supply to market”, but Riyadh also noted (see highlight below) that actual production crashed 1,897 kbpd from July to 6,238 kbpd in August as the Houthi maritime ban mucked up reroute Saudi logistics and attacks hit infrastructure.
On the one hand it'd be weird to end the war as soon as the political cliff that many assumed would force his hand has passed while on the other it would make a lot more sense if Trump has wanted to, for a while now, rage-quit and cut a politically unpopular deal with Tehran
while i appreciate that—especially through Hormuz crisis—crude and crack spreads have generally moved together, it's really important that they don't NEED to and that crude and diesel are different commodities—could easily imagine a world with $60 crude and $100 diesel cracks
Washington just scuttled a bunch of Iranian tankers off Kharg island And Tehran just cluster-bombed a US base in Jordan. https://t.co/btpr4MJmG3
BBG: "Several explosions were heard from the anchorage area of Iran’s Kharg Island, the semi-official Mehr news agency reports, citing its reporter on the island" No official explanation yet. Crude pops a bit but 🤷🏻♂️ https://t.co/Wtd6DSqcrn
Re: the ongoing debate about how much oil is getting through Hormuz and whether a particular WH claim is “True”, so so so much comes down to charity of the claim treatment and tone/framing of the assessment. For example, a claim of 18 MMbbl over a given day can be an especially charitable clipped 24(ish) hour period—true in a tortured sense while misleading or cherry-picked. Or a really high non-specific number can be charitably interpreted to mean the full broader middle east (with reroutes) rather than Hormuz, specifically. Or a claim of 9 MMbpd when, say, only 6-7 MMbpd is confirmable can be both said to be “broadly” or “directionally” correct while at the same time being a “plausible exaggeration”. Or if that pace was only realized weeks after the claim it’s just “early.” This is all fine! But given both the obvious fogginess of the data and the acute political undercurrent to the topic, best if folks are specific. FWIW, I currently see Hormuz petroleum flows (crude + products) in the ballpark of 8 MMbpd**, with some of that representing re-displaced Saudi crude from the Red Sea. And based on my tracking I have generally judged White House Hormuz transits numbers are directionally correct, plausible, but cherry-picked and often meant to mislead (like Trump’s 18 MMbbl claim). **Chart below, highest I’ve confirmed thus far (with adjusted Kpler data) is just more than 8 MMbpd, with the current level lower but expected to be revised higher to roughly that same level.
Every time I get on a plane the US starts bombing Iran and I only find out when my phone reconnects to wifi. https://t.co/2K2penRe4O
UKMTO reports tanker struck by unknown projectile while transiting inbound through Hormuz. https://t.co/3dqVSf36xG
we're all still figuring out the new reality i'm personally working *a lot more* on China oil data than I am on OPEC math these days https://t.co/FoYfVwnDn3
Sure, why not BBG: “The Justice Department is preparing to activate a long-dormant maritime war court to streamline military capture of Iranian oil tankers as US prizes, according to three people familiar with the plans. Reviving prize courts, which is expected to face legal challenges, is intended to strengthen the blockade of Iran and offset the cost of the conflict.”
Rough week for crude thus far. You could be tempted to attribute this to the latest headlines on the Iran-Oman agreement or some other diplomatic development. I tend to think it makes more sense in the context of the rapidly rising tanker traffic indications—particularly Gulf loadings.
In the exaggerated rhetorical war, Washington’s claims now closer to reality than Tehran’s.
TOTAL Middle East oil loading is up slightly but still at less than half of pre-war levels thanks to the split fortunes of the Gulf and Red Sea. Gulf loadings have climbed back to ~7 MMbpd on a 10dma basis, up from ~5 MMbpd in early August and down from the ~10 MMbpd peak during the post-MOU breakout. This is directionally in line with White House claims. But, at the same time, Red Sea loadings have collapsed, with some of those Saudi flows having been rerouted back to the Gulf.
UKMTO reports two attacks today, one in Hormuz and one in the Red Sea Hormuz: "struck by an unknown projectile causing damage to the engine room and disabling the vessel" Red Sea: "63NM west of Yanbu .. struck by unknown projectile causing a fire to the vessel on the main deck" https://t.co/ybyU5QaJJU
These UKMTO reports now include what the US is claiming to be getting through—latest claim is 74 ships between August 20–22. Harder to translate that into a high confidence oil flow estimate without more detail. (Note: this is what the US is *claiming* to be getting through) https://t.co/I6uTzrtMJx
A “drop”, in standard terms, is 1/20 mL, implying roughly 3.18 million drops per barrel. Given that we know *at least* ~5 million barrels of oil per day is getting out of Hormuz, that implies roughly 15.9 trillion drops of crude getting out daily. Tehran has some work to do.
Was interesting to see this NYP piece cite UKMTO data, given that I had actually stopped using it because the data published in the table was routinely too low given missing/lagged dark transit IDs. Then I saw the lower chart, which lines up with the NYP’s cited estimates. Weird to see the inconsistency between the tables and chart, and then noticed this highlighted bit in the source notes: Data also includes “U.S. NCAGS data reflecting U.S.-facilitated Strait of Hormuz transits only”—so the very low table confirmed numbers are simply being supplemented by whatever numbers Washington provides?
Still seeing a LOT of this, folks. There’s good reason to be skeptical of White House Hormuz transit numbers But pushing back by saying “tanker tracking estimates for today/yesterday only show 1-2 ships” is a bad argument because as anyone who works with this data knows dark transit decisions come with a lag. Those confirmed Hormuz transits also regularly miss ~2 MMbpd of dark shuttle activity, which we add in on top of confirmed Hormuz crossings with an estimate using orphan ship-to-ship transfer loadings in the Gulf of Oman.
The thing is that if the White House’s Hormuz transit numbers are correct it won’t take long to confirm with imports at the other end—still not seeing it yet. note: they’ve now said 9, then 10, and most recently 8 MMbpd (7dma) is crossing Hormuz, so choose whichever you’d like!
The thing is that if the Trump admin cant keep jawboning with “the war is over!” every other day it makes sense to switch it up to daily torqued and unverifiable proclamations about the huge gobs of oil that you’re smuggling out of the Gulf.
Bonus question: how much Saudi crude does the US Navy currently see transiting the Bab el-Mandeb? I’m all ears!
🛢️ OIL CONTEXT WEEKLY 🛢️ ⛽️🚀 Crude prices continued to climb amidst diminished US-Iran diplomatic hopes, while sustained diesel crack spreads hit all-time highs as US distillate stocks hit three-decade lows for this time of year. Summary below, full report in reply. https://t.co/uOtH97pB9b
East of the Bab el-Mandeb is the new East of Suez.
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