Oil is still quietly crossing Hormuz, TotalEnergies CEO says
Pouyanne's comments offer a rare on-the-ground account of how physical crude flows are actually adapting to the Hormuz risk premium, suggesting the market has found a working, if quiet, mechanism for moving oil out of the Gulf even as headline benchmarks price in disruption. The scale of the producer discount, as much as $30 a barrel below Brent, points to real desperation among sellers rather than a temporary dislocation, which could keep a lid on how far Brent itself can run even amid ongoing sanctions and shipping risk. The much steeper economics for refined products, where transport costs are effectively prohibitive, helps explain the unusual split Pouyanne describes between a bearish crude market and a bullish products market, a dynamic that could keep crack spreads elevated for as long as the strait remains constrained. Total's continued investment in alternative pipeline routes signals large producers still expect Hormuz risk to be a multi-year rather than transient feature of the market.
---
Total's CEO says the strait everyone assumed was closed for business is quietly still open, just at a steep discount only the desperate are willing to accept.
Summary:
- TotalEnergies CEO Patrick Pouyanne said the company is profitably moving oil through the Strait of Hormuz, with higher transport costs more than offset by steep discounts from crude producers, according to Reuters
- Pouyanne said Total is probably the largest trader of oil from Iraq and Qatar, with crude moving through the strait quietly rather than publicly
- Producers are selling crude at $50 to $60 a barrel, roughly $30 below Brent, which traded above $90 a barrel on Monday, reflecting how desperate producers are to place their oil
- Moving a very large crude carrier through the strait and back costs around $20 million, adding roughly $10 a barrel in transport costs across a 2 million barrel cargo
- The economics do not work for refined products given smaller tanker capacity, resulting in a surcharge of around $50 a barrel that Pouyanne described as unsustainable, leaving a bearish crude market alongside a bullish products market
- TotalEnergies still plans to invest in alternative export routes, including a pipeline from Baghdad to Syria and doubling the existing Fujairah pipeline in Abu Dhabi, which the UAE hopes to expand to help maximise exports outside the strait
TotalEnergies is profitably moving oil through the Strait of Hormuz, with steep discounts from crude producers more than offsetting the added cost of war risk transport, chief executive Patrick Pouyanne said at a Norwegian energy conference on Monday, according to Reuters. Pouyanne said the French oil major is probably the largest trader of crude out of Iraq and Qatar at present, and that oil continues to move through the strait, just quietly rather than publicly.
The Strait of Hormuz, once a transit route for around a fifth of global oil and LNG supplies, has been effectively paralysed during the US and Israeli conflict with Iran due to the threat of bombing and mines. Pouyanne has previously called, alongside others in the industry, for greater investment in alternative export routes out of the Middle East, but said Monday that the strait remains commercially viable for companies able to find ship owners willing to make the crossing.
The economics rest on how desperate producers have become to place their crude. Crude oil is sold to you at $50, $60 per barrel, not the Brent price, because the producers are desperate to push their oil into the market, Pouyanne said, a discount of roughly $30 a barrel against Brent, which traded above $90 on Monday. Against that gap, the added cost of transport looks manageable. Pouyanne estimated it costs around $20 million to move a very large crude carrier through the strait and back, which works out to an additional $10 a barrel once spread across a roughly 2 million barrel cargo.
The same arithmetic does not hold for refined products, Pouyanne said, since product tankers carry smaller volumes, pushing the equivalent transport surcharge to an unsustainable $50 a barrel. As a result, essentially no product tankers are currently moving out of the strait, a gap he said has produced an unusual split in the market, with crude trading bearish even as refined products trade sharply bullish.
Despite the current viability of Hormuz transit, TotalEnergies is continuing to invest in alternative export infrastructure. Pouyanne said the company plans to become a partner in a pipeline linking Baghdad to Syria and will also invest in doubling the capacity of the existing Fujairah pipeline in Abu Dhabi. That pipeline, also known as the Habshan-Fujairah line, can currently carry up to 1.8 million barrels a day and has become an increasingly important route as the United Arab Emirates works to maximise crude exports from its Gulf of Oman coastline, bypassing the strait entirely. The UAE aims to double that pipeline's export capacity by next year.
This article was written by Eamonn Sheridan at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
FX初心者には必須 無料のうちにGET！
