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2026-10-23 13:01:14 Citi released a research report stating that despite some recovery in crude oil flows from the Arabian Gulf, short-term risks in the oil market remain skewed to the upside as inefficient logistics have caused freight dislocations, preventing delivery supply from fully normalizing, while geopolitical risks could re-emerge around the Israeli parliament and the US midterm elections. The bank noted that the normalization of crude exports from the Arabian Gulf has mainly been reflected in volumes rather than logistics. Unprecedented shipping inefficiencies have kept delivered crude costs elevated. Freight rates for very large crude carriers (VLCCs) from the Arabian Gulf to China recently approached USD250 per tonne, equivalent to around USD35 per barrel, more than 20 times the average level of the past decade. OilX data showed that Middle East crude exports remain more than 4 million barrels per day below the level of the same period last year, while more than 1 million barrels per day of Arabian Gulf crude exports in September were completed through ship-to-ship (STS) transfers. Due to sanctions, idling and war damage, effective shipping capacity remains far below nominal capacity, with only about 784 of more than 930 VLCCs globally currently in service. The bank also said that under the US-Russia diesel agreement arrangement, the US government announced a six-month suspension of sanctions on Russian diesel trade. Russia pledged to export 300,000 tonnes to the US in October, about 500,000 tonnes in November, and then further increase exports to around 1 million tonnes. Russian diesel exports are expected to recover to around 500,000 barrels per day, which may ease pressure on global gasoline crack spreads, although elevated freight rates and refinery constraints could slow the transmission of additional supply into lower delivered product prices. Regarding client meetings, the market generally expects US-Iran tensions to persist as a prolonged, low-intensity situation. The oil market may remain volatile but gradually strengthen, rather than experience a sharp geopolitical risk premium surge. Confidence in the forward curve is relatively weak, as regional tensions extending beyond 2026 could support forward oil prices, although any diplomatic breakthrough could quickly erase geopolitical premiums embedded in long-term contracts.(da/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |