This is an excerpt from an opinion article by Fox News’ Hugh Hewitt.
“Iran’s regime has lost control of the Strait of Hormuz,” Swiss energy analyst and investor Alexander Stahel declared in his Monday morning investment letter “The Commodity Compass.”
Stahel followed up his assertion with a 1,200-word description (excluding maps and charts) of how the operation that he describes as “the Hormuz shuttle” got stood up and is now running massive quantities of oil out of the Arabian/Persian Gulf to an oil-thirsty world.
Find and read Stahel’s detailed analysis. He has an “X” account where he posts under his own name and links to his newsletter. He is persuasive.
First, the United Arab Emirates and then its neighbors developed an enormous system to shuttle oil out of the Gulf via a new shipping channel which hugs the Omani coast and which is patrolled and protected by the United States military. Central Command isn’t replicating the destroyer-heavy escort system of decades past when Iran threatened the Strait, but its new tactics are effective and the September decline in the price of oil demonstrated that, as October’s anticipated decline will as well.
It started early. Already back in May, it placed eleven hulls — mostly VLCCs [very large crude carriers], owned, leased & operated by ADNOC [Abu Dhabi National Oil Company] — to get the risky job done of shuttling crude out of the Persian trap via the Oman Lane into the Gulf of Oman, unloading it via Ship-to-Ship (STS) transfer and then re-entering the Persian trap to repeat the trade.”
The detailed assessment focuses on the key exporters: “ADNOC has become very good at the Hormuz Shuttle, Aramco [Saudi Arabia’s state-owned energy giant] and Kuwait have learned from the UAE and copied the model. By now, we have some 116 hulls active in the Shuttle trade around the Strait of Hormuz, most of them using the Oman Lane.” The assessment is that Qatar and Iraq are also now using the “Hormuz Shuttle.”
“Iran has failed to shut the Strait,” Stahel concludes, “the shuttle system is scaling, and time is increasingly working against Tehran.”
At this writing, West Texas crude — critical to the American market — is at $94.50 a barrel and Brent just under $107.00 as the world’s commodity traders worry that President Trump rejected the Iranian overtures to reopen talks.
Read the full article here
