Oil Supply Chain
Suddenly everyone is interested how much traffic is going through the Persian Gulf, and to where. Also who has how much supply left! Sigh. You are reading too much news, eh? And you didn't see it coming? If you are reading news, this escalation was public information for months. Anyways, since you are interested I will provide some facts, and keep in light on opinion and interpretation.
Below is the current commercial ocean bound traffic through the Strait of Hormuz. Yeah! if you read the news, you will feel it is empty!
Yes, although it doesn't look empty, but there is little traffic going through the strait. Most of the tankers are stationary, as they don't want to take risk, just like you are thinking. It is only 5th day of the war, and potentially US navy can escort tankers through the strait when the time is right. Note, that Iranian Navy is mostly destroyed.
Air Traffic
Both Doha and Dubai airport remains mostly closed till March 07, as per emirates website. That is a much bigger deal in my opinion. You can see what is happening to commercial traffic in the live flight radar below.
I use both DXB and DOH extensively for travel, and I am sad to see they are closed. However, some commercial flights are trickling out of there. I have three colleagues currently stuck in DXB and one in DOH. Two of my colleagues got out of DXB 1 hr before the closure on Saturday. I'd say West to East international travel over middle east is heavily impacted. DXB and DOH are two of my personal favorite airports for the record.
Okay, who has how much?
Let me write this in bullets, the data is from Kpler, which tracks global supply chain for oil and gas.
- China 115 days
- Japan 254 days
- South Korea 210 days
- Taiwan 120 days
China does have significant domestic production, and it also operates three major crude pipelines, two of which transport oil from Russia and Kazakhstan and are shielded from Middle East disruptions. So I don't see China is in any kind of serious pressure. The other three doesn't have any meaningful production, but as you can see they all have at least 3 months of reserve.
So unless you expect this conflict to last 3-4 months, I don't see any reason to worry about the oil supply chain to major consumers in Asia.
And, if that happens, the escort option is always available.
Cheers!
Consider reading the news a bit less for your personal mental health. I know I am doing the same. Lot of these events are beyond your control and there is nothing much you can do other than worry. Even you worry to death, nothing is going to change. That is the fact.
Again, another post that cuts through the BS. The media is more about the politics anyway. I rarely have seen them talk much about the global impact of the war and especially on oil. Of course gas prices here are going up. But based on what you are sharing, it seems to be for little reason other than fear or price gouging.
There's no fundamental reason for price to go up. That said, I am always of the opinion that every country should seriously think about their energy security. Europe as a whole is guilty. If they feel price shock, I have no sympathy for them. Because they killed their own oil exploration program. Japan and South Korea and Taiwan doesn't have a choice as they simply don't have any oil, so there is nothing they can do other that buy and hold which they are doing.
Absolutely. I try not to but when things escalate I find I like to read and listen more (there is some excellent YouTube commentary) so I know more about what's going on so that I'm not emotionally influenced by click bait headlines or what idiots say in the staffroom. I'm finding it an excellent study of history and politics as well as narrative drama. The alternative is just to rant about Trump like everyone else as if we can do anything about it by calling him names.
Then, I put down my phone and go to the beach and control things I can, which is very little, and count my blessings I was born where I was.
Yes, I am fairly tired of the news cycle myself. I don't find any value there anymore. Middle East is something I am invested in for work, so I get information right at my finger tips. I am in fact working actively for oil and gas exploration in Middle East for a living...so I don't have a choice. However, my news is not from conventional sources.
Regarding my personal time, I rather learn Japanese :)
Knowing you do what you do, I'm always super interested in your viewpoint, so please know there's value in your writing here! Spot on about energy and food independence. One of my colleagues in Japanese with a long term plan to move back to Okinawa where his family were from. His parents had a pearl diving company in Queensland many years ago. I love hearing his stories of Japan and still wish I'd persevered with it at high school.
Damn I wish we could travel to Iran
Whilst not keen on the US Israel thing a regime change would make life easier for a lot of people.
I am looking at the markets and outside of some commotion in Asian markets US markets view this as a non-event and crypto is going up...
Yeah, I personally don't expect any short term impact. Longer term, a democratic Iran will be most excellent in my line of work. I would love to do some work there personally. I am looking forward to get over there.
I am not a big fan of the current administration, but it seems like this could actually lead to better situation in the middle east if the regime change occurs...
Same here.
You know my view on Trump very well.
Funny thing is that I have looked forward to this regime change for all my adult life and no one tried it. Finally, someone did.
Thanks for this. I have been trying to tell people the same thing without the specific facts that you gave. They largely don't believe me. Typical of the world we live in now I guess.
I am hoping this conflict is over soon, and things go back to status quo.
Me too!
Big money running into oil market these days!