Gulf oil exports steady in July, still 40% below pre-war mark

LONDON: Gulf countries’ crude oil and condensate exports were largely steady in July and remained about 40% below pre-war levels, shipping data showed, with signs of a slowdown emerging in the second half of the month as fighting in the region intensified again.

The relatively stable export levels have helped ease concerns about a sharper supply disruption and offset a drawdown in global oil inventories.

However, tanker traffic through the key Middle Eastern waterways of the Strait of Hormuz and the Bab el-Mandeb remained well below levels before the U.S.-Israeli war with Iran began on February 28.

Crude and condensate exports from Saudi Arabia, the United Arab Emirates, Iraq, Kuwait and Iran rose just 2% from June to average 10.7 million barrels per day (bpd) in July, according to Kpler.

Exports reached between 12 million and 13 million bpd in the first half of the month before slowing as fighting resumed between Iran and the United States, Kpler and Vortexa data showed.

Iraq doubled exports from June, driving the increase alongside higher flows from Kuwait and Iran, while shipments from Saudi Arabia and the UAE declined.

Nine additional very large crude carrier loadings boosted Iraqi exports in July, although flows through Hormuz have slowed as fighting escalates, Vortexa analyst George Morris said. At least 14 vessels reported attacks in the region to the International Maritime Organization in July, up from eight in June.

Higher exports have enabled some producers to raise output. Kuwait raised crude production to 1.971 million bpd in July from about 1.65 million in June, a person familiar with the matter told Reuters.

Still, Saudi Aramco CEO Amin Nasser said on Tuesday the world had lost more than 2.6 billion barrels of oil since the war began and rebuilding inventories would take about 18 months at a rate of 2.1 million bpd, even if Hormuz reopened immediately.

Red sea exports slowing

Saudi crude exports from the Red Sea port of Yanbu slowed last month as Yemen’s Iran-backed Houthis stepped up attacks near the Bab el-Mandeb strait.

Yanbu loadings fell to 3 million bpd after July 20 from 3.8 million bpd in April-June, according to Energy Aspects.

Many tankers are loading at Yanbu with Automatic Identification Systems transponders switched off, while others are rerouting via the Suez Canal and making greater use of the SUMED pipeline linking the Red Sea with the Mediterranean to avoid the Bab el-Mandeb, Energy Aspects co-founder Richard Bronze said.