Saudi Arabia Ranks 3rd Globally in Creation of Firms

The reopening of the Strait of Hormuz, following an interim deal between the US and Iran, could significantly impact Middle Eastern crude oil markets by releasing millions of stranded barrels. Industry executives anticipate this surge in supply could put further pressure on prices.

This potential wave of supply comes after Gulf producers increased exports through ship-to-ship transfers off the UAE and Oman, which already depressed spot differentials for Middle East crude. Analyst Muyu Xu noted that the Strait's reopening could unleash approximately 93 million barrels of non-Iranian oil from the Arabian Gulf, with additional volumes expected from less visible channels. Some traders estimate around 50 million barrels are set for release, with further potential from Iranian tankers if US sanctions are eased.

However, the immediate impact on demand might be limited. Many Asian refiners have already committed to crude cargoes for June to August. Furthermore, several refineries in China are scheduled for maintenance, which is expected to reduce their throughput. China's overall refining capacity utilization has been low, and while state-owned refiners may increase runs in July, a large-scale increase in crude buying is unlikely without policy changes from Beijing.

US President Donald Trump and Iranian President Masoud Pezeshkian digitally signed a 14-point agreement to end the war, with Iran's foreign ministry stating the agreement is already in effect. The deal's details, including the potential lifting of US restrictions on Iranian crude, could release an additional 72 million barrels stranded on tankers west of Chabahar.

“

A large-scale increase in crude buying appears unlikely unless Beijing relaxes restrictions on product exports and/or proceeds with another round of strategic petroleum reserves replenishment.