(Nov 10): The volume of refined products being loaded within the Persian Gulf is rising, with most of that exiting the Strait of Hormuz and providing some relief to one of the tightest corners of the global oil market nine months into the Iran war.

The region loaded about three million barrels a day of distillates, including diesel, petrochemical feedstock naphtha and liquefied petroleum gas, in October, according to data from ship-tracking and analytics firm Vortexa Ltd. While that is still only about half of pre-conflict levels, that is up from a trough in May of about one million barrels a day.

Most of those shipments have or will soon exit through Hormuz, said Xavier Tang, senior market analyst for Vortexa, although exact volumes are hard to pin down due to transfers within the Gulf and methods of obfuscating flows such as vessels turning off their transponders. Still, the recovery in oil products is lagging that for crude, which at some points in prior months had neared early-February levels.

“Crude is going at about 80% to 85% of pre-war levels” including pipeline exports, while “products are at about 35% to 40%,” Fereidun Fesharaki, chairman emeritus of industry consultant FGE NexantECA, said last week, referring to Middle Eastern oil exports including through Hormuz.

There’s been an overall pickup in vessel traffic across different commodities in the crucial waterway. Crude remains the most successful at exiting the embattled region, while flows of liquefied natural gas have risen to about a third of levels before the conflict.

“Oil infrastructure such as refineries remains susceptible to drone strikes,” which has led the region’s producers to prioritise crude shipments, Tang said.

Global refined markets remain tight, with some countries opting to prioritise local consumption despite attractive profits on exports. International shipments of diesel from major producer China, for example, may remain curbed as the country grapples with low domestic inventories.

Uploaded by Arion Yeow