Iraq just signed 48 DEALS with US companies, including with USA oil giants to bypass the Strait of Hormuz via a new pipeline
Total deals are worth over $60 BILLION, per Reuters. Chevron, ExxonMobil, Shell and more are also involved They also involved other industries, including healthcare, communications and infrastructure. It’s not clear when the oil deals will be able to create viable alternatives to the Strait of Hormuz, through which about a fifth of the world’s oil flows. Goldman Sachs estimates that pipelines in just one country take at least two and a half years to build, and these pipelines would travel through two or more nations. Iran has sought to close the Strait repeatedly since the U.S.-Iran war began Feb. 28, causing sharp gyrations in oil and gas prices. Alternatives routes for oil will weaken Iran's main bargaining power. Will China be the big loser here? Source: AP, Al Jazeera
Update (7/12 PM): The tape keeps thinning
7 commercial crossings in the last 24h (5 E→W / 2 W→E), down from 11 yesterday and barely ~6% of the Jan–Feb run-rate. Brent's grinding higher, ~$78.79 and climbing as the closure prices in. Flow down, crude up Source: @TheTerminal Michael McDonough
Amid the sharp military escalation, odds of a full Iran blockade by July 13 jumped 50% since the last update 4 days ago
Source: zerohedge, Polymarket
Saudi Arabia cut the price of its main crude grade for Asian customers, effective August, amid weakening demand and easing tensions.
It's the largest reduction in over two decades. The sharp price cut comes as pressure grows on the world's largest crude exporter, as softer demand in Asia coincides with improving supply conditions following the easing of geopolitical tensions in the Middle East.Source: The Times Of India
UAE Crude Output Nears Record High Following OPEC Exit Amid Surge In Chinese Buying
Source: zerohedge
IRAN SUSPENDS U.S. PEACE TALKS LESS THAN 24 HOURS AFTER SIGNING DEAL
Iran has reportedly suspended the entire 60-day negotiation process with the U.S., citing Israeli strikes on Lebanon, according to Fars and Al-Mayadeen. Vice President JD Vance has reportedly postponed his planned trip to Switzerland, where U.S.-Iran talks were set to begin Friday, per Axios. Both delegations were preparing to depart before the talks were called off. Note that is barely moving Source: Coin Bureau
Bloomberg's Michael Ball notes that material flows through Hormuz creates a different problem for crude,
Especially in Asia, as too much supply hits a region that has already adapted to fewer Middle East barrels. Asian refiners replaced disrupted Middle East barrels with US crude and other alternatives, cut some processing runs when prices rose and are now facing a sudden wave of Persian Gulf supply. This has led Middle Eastern crude curves to flip into bearish contango, showing the market is pricing a near-term glut rather than shortage. Source: Bloomberg, zerohedge
E4 nations including the UK, France, Germany and Italy said on Sunday the countries were prepared to lift sanctions on Iran
in response to steps on its nuclear program after the US and Iran reached a deal to end their war. Source: Al Jazeera Breaking News @AJENews
