Amid the rising tension in the Middle East, Saudi Arabia's tanker and logistics group Bahri has suspended transits through the Strait of Hormuz, the world's most important oil chokepoint which is in close proximity to Iranian waters, the Wall Street Journal reports, as the market is digesting the retaliatory Iranian attack on U.S. troops in Iraq.
Over the past week, the tension in the Middle East and around the Strait of Hormuz has noticeably increased after the U.S. killed the top Iranian general of the Al Quds forces, Qassem Soleimani. Global markets and oil investors were waiting for the Iranian retaliation, which came late on Tuesday with a ballistic missiles attack on U.S. bases in Iraq.
Apart from the Saudi tanker group, Brazil's Petrobras has also suspended transits of oil tankers through the Strait of Hormuz, according to the WSJ.
The Strait of Hormuz is the most important oil chokepoint in the world with daily oil flows averaging 21 million bpd, or the equivalent of 21 percent of global petroleum liquids consumption. According to EIA estimates, 76 percent of the crude oil and condensate that moved through the Strait of Hormuz last year went to Asian markets, with China, India, Japan, South Korea, and Singapore the top destinations.
After the killing of Soleimani last week, the British Royal Navy is now escorting UK-flagged vessels going through the world's most vital oil choke point.
While tanker owners and operators and countries move to protect their shipments in the Middle East, the energy minister of the United Arab Emirates (UAE), Suhail al-Mazrouei, said in Abu Dhabi on Wednesday that he doesn't see immediate risk to oil transits through the Strait of Hormuz.
"This is definitely an escalation between the United States, which is an ally, and Iran, which is a neighbor, and the last thing we want is more tension in the Middle East," al-Mazrouei said on the sidelines of a conference, as carried by Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More