Middle East Oil Flows Far from Normal Despite Signs of Oversupply

AI Summary

Oil exports through the Strait of Hormuz and across the Middle East have reportedly rebounded toward pre-war levels, while weakening regional benchmarks point to a possible crude surplus. However, war-related risks, higher insurance premiums, and record tanker rates are keeping costs elevated for refiners and consumers.

Crude oil flows through the Strait of Hormuz and the whole Middle Eastern region have recovered to close to pre-war levels, vessel-tracking services have been signaling for over a month now. Middle Eastern benchmarks have been weakening for weeks, suggesting an oil glut may be building amid rebounding Persian Gulf exports and global demand destruction amid high prices. On the face of it, an oversupply of crude oil could be forming. But the costs to refiners and consumers are not falling. War, insurance premiums, and record tanker rates have raised…