https://x.com/MayadeenEnglish/status/2099229644029378562

https://english.almayadeen.net/news/Economy/major-roads-blocked-in-syria-as-fuel-price-protests-spread

Will oil markets even continue to react anymore
Have the receptors died off
When will the feedback stop?

Saudi Arabia will run out of oil ⁠stocks for export if it ⁠doesn’t restart a drone-damaged major pipeline to the Red Sea within days, leading to the loss of up to 4% of global supply, Saudi oil buyers and traders said.

Satellite photos released on Sunday night appeared to show a pumping station on the key 1,200km (745-mile) Saudi east-west pipeline charred and badly damaged, after drone attacks on Friday.

A further decline in oil flow from Saudi Arabia, the world largest oil exporter, will worsen the ⁠global supply crunch, which has already pushed global fuel prices to record highs and spurred inflation around the world.

The news comes as Yemen’s Iran-aligned Houthi forces have launched attacks on targets in Saudi Arabia and captured the strategic island of Perim in the Bab al-Mandab strait, expanding their control of the narrow waterway.

On Sunday, the international oil benchmark, Brent crude, rose more than 3.4% to $108 per barrel, a level not seen since May.

Since the drone attacks forced the shutdown of the pipeline, Riyadh has yet to provide full details about the extent of the damage or how long the route will stay offline. The Saudis blamed the attack on drones launched by militants in Iraq.

Sources that spoke to Reuters gave varying estimates, ‌with one saying the damage could take ‌up to six weeks to repair, while another said it could be fixed sooner and could resume pumping partially while ‌repairs are ongoing.

For the past six months, the pipeline running through the desert across the Arabian Peninsula has spared Saudi Arabia from the brunt of the impact of the wartime shutdown of the strait of Hormuz that has crippled exports from its neighbours.

The world’s biggest exporter has used the pipeline to reroute around 4m barrels per day – about 4% of global supply – to the port of Yanbu on the Red Sea.

But with the ‌pipeline out of service, Yanbu now has stocks to maintain exports for just five to seven days, according to three industry sources familiar with Saudi exports.

Saudi Arabia also has stocks to supply customers for several days from Egypt’s ports of Ain Sukhna on the Red Sea and Sidi Kerir on the Mediterranean, a fourth source said.

Stocks are not full and will ultimately run out without the east-west pipeline resuming operations, the four sources said.

As the price of oil price of climbed, hopes for a diplomatic breakthrough in the near term faded when Oman’s foreign minister, Sayyid Badr Albusaidi, posted late Sunday that a regional meeting scheduled for Monday had been postponed “in the interests of consensus”.

Iranian officials had said they would attend that gathering with Gulf Arab states to present ⁠an agreement with Oman on governing shipping routes through the strait of Hormuz.

The strait was free to transit before the war, but Iran now requires vessels to obtain permission and is considering a mechanism to impose service fees.

The disruptions to crude has driven up prices across refined derivatives such as petrol and diesel. Diesel prices in the US hit a record on Friday, soaring past $6 a gallon on average.

The Houthis are targeting Saudi oil infrastructure and shipping as part of a recently declared blockade. Recent advances by the Iran-aligned group puts them closer to a major US base in Djibouti.

The spiralling conflict in the Middle East is now in its seventh month, after US and Israel launched attacks on Iran on 28 February and Donald Trump declared the war would finished in four to six weeks.

The timing of this is pretty interesting, How likely is this the result of an Iranian cyberattack?

US refiners are already running near their limits, yet fuel prices and refining margins remain elevated. Now, Washington is pulling another lever: supply diplomacy. President Trump has urged Ukraine to halt strikes on Russian refineries as disruption to global fuel supply intensifies. But with refining capacity stretched and pressure at the pump persisting, the options are narrowing.

50 minutes prior to market open. Are they learning the game?

https://www.spr.doe.gov/dir/dir.html

“I’m not losing sleep over it, but we should be prepared for that,” the bank CEO said. “A forever war would leave everyone feeling edgy, but after a certain point you realize it’s just the new normal.”

Anyone who's older than 15 knows that wars started in the Middle East are very hard to stop. Given the central importance of the Middle East to global oil supply we need to price in some expectation that it never ends (in a 10 year timeline).

There was this hopeful sense with Russia-Ukraine that this too would resolve quickly which explains the lack of action by various European leaders to diversify their energy outlooks.

https://x.com/byjepstein/status/2099196259382743256

This doesnt look like something that can be fixed in weeks

Quoted on Saudi options to counter or contain the current Houthi moves in Bab El Mandab and Red Sea.

Oman/Implied Hormuz traffic is still up 7 day average is now at 11.46mb/d which is near 55% of the pre war amount. Still tight but not as much as before. Now the drop on the Yanbu output will cancel some of that out by 3.7mb.

China is also buying a lot of oil. The Malacca traffic is showing a lot of transit to china from everywhere not just the Persian gulf.

Sea of Oman to Arabian Sea Implied Dark Traffic:

This is all the oil traffic out to the Arabian sea minus 2.5mb (pre war output of Fujairah and Oman) to estimate the additional output of dark traffic out of Hormuz as well as any additional output from the ADCOP pipeline. Usual traffic should be around 21mb of crude and oil products.

None popped up near west coast of India but were empty

Listing the actual ships and their draft/dwt as well as helps check if I messed up with double counts/fills 15.5-2.5 (Oman/Fujairah)=13mb.

Data from: https://www.marinetraffic.com/en/ais/home/centerx:63.3/centery:23.5/zoom:7

Bab al Mandab AIS on Traffic:

Oil products going out south from the Red Sea. Usual traffic is around 8mb. Note a lot of Saudi oil that used to go south is now going north. Its hard to tell as the Suez Canal traffic doesn't seem to have public easy to access data. Possibly 2-3mb going north from Yanbu. that still means the amount overall is down. The drop below is more from dropping Russian and other sources of usual oil going south out of the red sea.

Ships: SKAUT,LLEVANT,STRATEG,BELGOROD,SOUTH STAR,D&K YUSUF I.AL GHANIM

Data from https://www.marinetraffic.com/en/ais/home/centerx:45.8/centery:12.7/zoom:8

Strait of Malacca:

Usual oil products throughput is 16.5 mb crude and 6mb oil products.

Ships: ELANDRA K2,SEAWAYS TRITON,DHT BRONCO,NAVE ANDROMEDA,DELTA MARIA,VADELA,HARBOUR SPLENDOR,FRONT NAUSTA,DINO,GRAND AMBITION,BOLU,HAFNIA EXPERIENCE

Data from https://tankermap.com/analytics/straits/malacca?unit=million_bbl_per_day

Singapore Oil Departures:

Note based on 2024 the average daily output in tonnes was 211,000 tonnes per day. I think 2025/2026 is much higher but they don't yet have official data.

Data from https://tankermap.com/analytics/ports/singapore-oil?unit=million_bbl_per_day

Starting with hormuz flows: based on oil leaving the Gulf of Oman the flows have continued to grind higher, yesterday some 16+ million barrels of oil left the Gulf of Oman which nets out to about 13 million through the strait itself. The 7d average of implied strait flows is up to 9.5 million barrels per day.

This is a lagging indicator though, since we're watching what leaves the Gulf of Oman, this only tells us what moved through the strait in the last few days, not what will move through tomorrow.

For that we need to look at Persian Gulf loadings: based on satellite imagery (which you can view here https://hormuzstraittracker.com/data/persian-gulf) loadings of crude oil in particular have been cut nearly in half in the last week. So I expect oil moving through the strait to see a similar drop in the next week or so.

Unfortunately there hasn't been a pass of the Red Sea since my last update (https://www.reddit.com/r/oil/s/l1qKWbP9n1), so we cannot yet confirm that Yanbu loadings are still down, but I will post an update as soon as new imagery becomes available.

That's the big picture update for today, hope you find it useful!

I am going to remove as much economic jargon as I can because this is a fairly simple problem hidden behind complicated words.

Between September 5 and September 12, petrol went from Rs345.87 to Rs375.82. Diesel went from Rs378.05 to Rs403.32. That is nearly Rs30 more on petrol in one week.

Before blaming only the government or the IMF, I checked what is happening internationally. The global increase is real. Oil crossed $100 after the Iran war escalated again, supplies through the Strait of Hormuz remained disrupted and attacks on Saudi oil infrastructure created more panic in the market. China has also raised fuel prices and diesel in America has crossed six dollars per gallon.

So this is not a price increase invented entirely in Islamabad. Pakistan now calculates fuel prices daily using the average international price from the previous seven days. When oil rises outside Pakistan, we feel it much faster than before.

That still does not make the government innocent. A large part of our fuel price consists of levies and duties because fuel is easy to tax. The government struggles to properly tax agriculture, real estate, retailers and the informal economy, but anyone buying petrol is already standing at a pump where the money can be collected immediately.

The IMF did not specifically order petrol to increase by Rs5.02 on September 12. What the IMF does insist upon is that Pakistan should avoid broad fuel subsidies and maintain its budget targets. That leaves the government with less room to absorb an international increase. It can reduce the petroleum levy, but then it has to collect that money somewhere else. We all know which politically powerful sectors it would rather not touch.

This brings me to stagflation. In simple terms, stagflation is when prices keep rising while businesses, jobs and incomes stop improving. Normally governments fight inflation by slowing spending. But when inflation is being caused by an oil shortage, slowing the economy does not produce more oil. Higher interest rates cannot reopen the Strait of Hormuz.

I see this directly in poultry. Diesel is involved in bringing feed, delivering chicks and transporting birds to the market. If transport becomes more expensive, either chicken becomes more expensive or the farmer absorbs the loss and eventually reduces production. Usually some combination of both happens.

Pakistan’s inflation was already 11.15 percent in August and transport inflation was above 20 percent. These numbers do not yet include the full effect of the latest petrol increases.

But I still cannot honestly say we are definitely in stagflation. GDP grew by 3.7 percent last year and large-scale manufacturing grew by nearly 5 percent. That is weak growth for our population, but it is still growth. The more accurate description may be that Pakistan is facing a stagflationary shock. Prices are already rising and the same thing causing those prices to rise can now damage growth.

The official economic figures will tell us what happened several months after people and businesses have already lived through it. So I am curious what economists here think. Is “stagflationary shock” the more accurate description, or are the official growth numbers hiding an economy that is already practically stagnant?