Middle East crude oil transport accelerates recovery! Saudi Arabia plans to restart the Ras Tanura export terminal.

Against the backdrop of the signing of a memorandum of understanding between the United States and Iran, as well as the ongoing peace negotiations, the reopening of the Strait of Hormuz has allowed for the resumption of oil transportation in the Middle East region. At the same time, it appears that Saudi Arabia, the world's largest oil exporter, is set to resume oil loading operations at the Ras Tanura terminal in the Persian Gulf. Automatic ship tracking signals show that Saudi-owned Very Large Crude Carriers (VLCC) "Zaynah" and "Amad" are likely to be among the first oil tankers to load at the country's main export terminal. On Thursday morning, these two ships were seen moving from anchorage towards the single point mooring (SPM) facility in Ju'aymah, where they can load crude oil cargo. Data shows that another empty Saudi VLCC is also anchored near the export terminal. The single point mooring facility at Ju'aymah is part of the larger export facility complex at Ras Tanura. Satellite images show that there has been no observed oil tanker activity at Ju'aymah or Ras Tanura since early March. These facilities have a combined capacity to handle 12 tankers simultaneously. Saudi Arabia's pace of resuming oil transportation activities is slower than some of its neighboring countries. Despite a significant drop in oil transportation through the Strait of Hormuz due to the Middle East conflict, Saudi Arabia has been able to redirect some exports to alternative ports along the Red Sea coast, giving it greater flexibility in resuming operations at the Persian Gulf export terminals. Meanwhile, as more oil cargoes accelerate leaving the Persian Gulf, certain key areas of the oil market suddenly face oversupply. Traders suggest that strategic stock releases, weakened demand from Asian buyers, and a significant number of oil tankers quietly leaving the Persian Gulf through "dark shipping" have led to slight oversupply in some key markets. According to traders familiar with the situation, after three consecutive rounds of tenders, Asian refiners have reduced their purchases from the Abu Dhabi National Oil Company's (Adnoc) procurement, and a similar trend is expected in the fourth round of tenders closing this week. They added that international oil giants and trading companies, including Shell and Mercuria Energy Group, have bought more crude oil. Traders suggest that some of the crude oil sold in Adnoc's latest tender is expected to flow to the European market, continuing a recent trend of Middle Eastern oil flowing to Europe as Asian buyers reduce purchases. Now, with buyers receiving numerous offers of supply, both the European and Asian markets are weakening. One of the most prominent examples is Angolan crude oil currently being sold at the largest discount in over a decade, with some transaction prices even dropping nearly $10 per barrel below the global spot benchmark for Brent crude oil. The discount on Angolan crude oil indicates that the global physical oil market has rapidly shifted from apparent supply tightness to signaling oversupply in a matter of months. Middle Eastern crude oil has been in a downward "backwardation" structure since mid-March, indicating oversupply. Expectations of continued improvement in supply have also driven Brent crude oil futures prices to continue falling, hovering near levels seen before the outbreak of the conflict in the Middle East in late February. Global commodity co-head at Goldman Sachs Group, Dan Struyven, said, "Due to weak demand for Middle Eastern oil in Asia, buying a barrel of oil today is even cheaper than buying one tomorrow. The reopening of the Strait of Hormuz is progressing smoothly and quickly." The drop in international oil prices has reignited concerns in the market about severe oversupply. The International Energy Agency (IEA) predicted last week that there will be a significant oversupply in the global oil market by 2027. However, the oil market's successful response to the interruption in supply through the Strait of Hormuz has largely been at the expense of depleting inventories, which will need to be replenished in the future, potentially absorbing some of the excess supply.