Oil Flows Rerouted Around Hormuz as Prices Slide After U.S. Pause

Overview

• Ukraine's foreign intelligence service says producers have sharply increased shipments that bypass the Strait of Hormuz, lifting diverted volumes from about 3.5 million barrels per day to roughly 6.5 million bpd and planning roughly 1.2 million bpd more by 2027.
• Market prices fell after the United States paused air strikes and signaled negotiations with Iran, with Brent and WTI futures dropping to the mid-$80s and low-$80s per barrel respectively.
• Barclays data show physical flows through the Strait remain materially reduced, with net crude and product exports averaging about 2.9 million bpd for the most recent reporting week versus 5.9 million bpd the prior week.
• The Caspian Pipeline Consortium's Black Sea terminal resumed loading after a week-long halt from drone attacks, which together with higher Venezuelan output and OPEC+ quota changes has eased near-term upward pressure on prices.
• Analysts warn the shift to pipelines and Fujairah/Yanbu exports could steadily depress demand for Russian Urals crude and cut Moscow's oil revenue while the threat of renewed strikes and Red Sea attacks keeps upside supply risk possible.