Global oil shortage hits inflection point as last pre-war cargoes reach refiners

BlockBeats report: April 14 — The global oil crunch is set to enter a more acute stage as the final tankers that left the Strait of Hormuz before the Iran war began on February 28 start arriving at refineries worldwide in the coming days, after the United States formally imposed a maritime blockade on the strait on Monday. The Financial Times said the remaining pre-war cargoes are expected to reach Malaysia and Australia by April 20, while the last shipments bound for the U.S. are also due to dock before the end of this week. J.P. Morgan said Denmark received its final batch of aviation fuel from Kuwait over the weekend. Nick Dale, an analyst at Energy Aspects, said: "When all Asian purchases leave the Atlantic basin, the shock will reach the West one month later. Refineries in Europe and the U.S. will also be forced to cut production starting next month." Stress is already visible in physical markets. North Sea Forties crude jumped to nearly $149 a barrel on Monday, its highest level since just before the 2008 financial crisis, while Brent crude futures traded around $100 a barrel. JPMorgan analyst Natasha Kaneva said refiners in Europe and Asia are competing aggressively for the remaining cargoes, driving the premium of spot crude over futures to a record high. Energy Aspects estimates that average daily arrivals of Middle Eastern crude (excluding Iran) into Asia in the first two weeks of April fell to 4 million barrels, far below the normal 13.4 million barrels. TotalEnergies CEO Patrick Pouyanné warned on Monday that a blockade lasting more than three months would create "severe supply issues" for jet fuel, diesel and liquefied natural gas, potentially forcing rationing. Governments are already responding. The Philippines, which sources more than 95% of its oil from the Middle East, declared a national energy emergency after domestic gasoline prices doubled. Indonesia and Vietnam have told citizens to work from home. Australia has drawn on fuel reserves, cut fuel taxes and launched a National Fuel Security Plan. The United Nations Development Programme warned that up to 32.5 million people could be pushed into poverty by the combined impact of higher energy and food prices and an economic slowdown.