Oil: Gradual easing as dark transits grow – Commerzbank

Commerzbank strategists argue that Brent crude should gradually retreat toward pre-war levels as covert tanker “dark transits” and diversions restore Gulf supply. They see transit volumes recovering to around 8 million barrels per day by year-end and potentially 12 million next year, while Oil products and natural gas remain tighter for longer.

Covert flows support Brent normalization

"We therefore expect shipping traffic through the Strait of Hormuz to gradually return to normal in the coming quarters."

"Our assumption is that transit volumes, including “dark transits,” will recover to around 8 million barrels per day by the end of the year and will even rise above that level next year. After six months, this gradual de-escalation would effectively have a similar impact on transport volumes as reaching an agreement."

"Taken together, this could mean that 13 million barrels per day of oil – out of the original 20 million barrels per day from the Gulf region – could reach the global market. In addition, oil production outside the Gulf region has risen by an average of 1.2 million barrels per day since the outbreak of the war. Taken together, this would reduce the remaining shortfall to approximately 5.8 million barrels per day."

"Should oil transits continue to rise in the coming year – for example, to 12 million barrels per day – the supply gap would narrow to less than 2 million barrels per day. For the global oil market, this would be of little significance overall. We therefore expect the oil price to ease in the coming quarters and return to near its pre-war levels by the middle of next year."

"Prices for petroleum products and natural gas are therefore likely to remain above their pre-war levels in the coming quarters as well."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)