The crude oil transportation volume in the Strait of Hormuz is indeed recovering, why hasn't the oil price dropped significantly yet? The answer is in terms of cost. Let's talk about this: 1. How much has been restored now? Based on the poetry of Kpler/Vortexa and other parties, there has been a significant recovery in crude oil and condensate exports from the Gulf region in September. Kpler statistics: Saudi Arabia UAE、 Iraq, Oman, Kuwait, and Qatar exported approximately 14.7 million barrels of crude oil and condensate in September. The latest Reuters commentary estimates that the current flow of crude oil through Hormuz, about 14.2 million barrels, has recovered to around 80% of pre war levels. I personally think that the credibility of these data is still acceptable. 2. What system does this form? If we delve deeper, in fact, a very mature "wartime export transportation system" has already formed in the Strait of Hormuz: Loading in the bay → High risk oil tankers controlled, leased, or designated by the producing country pass through Hormuz → arrive near Sohar in Oman, Fujairah in the United Arab Emirates, or offshore in the Gulf of Oman → ship to ship STS transfer to the buyer's normal ocean going oil tanker → transfer to a connecting ship and return to the bay to continue loading. In this system: 1) Saudi Arabia and the United Arab Emirates have the most mature systems, already operating on a large scale and in a continuous cycle; 2) Kuwait: also participating, but on a significantly smaller scale than Saudi Arabia/UAE; 3) Iraq: It is transitioning from "buyers sending their own ships to Basra to pick up goods" to IOTC renting VLCC to transport the goods out of the strait. It has just entered this mode; 4) Qatar: The core is not crude oil, but LNG, mainly transported through the strait by QatarEnergy's affiliated fleet and long-term charter ships, and the STS crude oil model is not the main line. Ships will form a safety window/formation style passage, with partial closure of AIS, and US sea and air forces providing cover. 3. High cost sources This system breaks down a transportation into two parts: The first paragraph is responsible for "adventure", and the second paragraph is responsible for normal transportation. It has indeed solved the problem of "oil transportation not being able to come out", but the problem is that the shipping cost is also really expensive. The latest survey by WSJ shows that some ship owners can charge up to about $40 million for a single shuttle trip And the crew's single dangerous voyage bonus can even reach up to $25000 per person. This has led to an increasing number of independent ship owners entering this market A shuttle VLCC carries four risks: war risk, ship damage risk, crew risk, and turnaround time risk. At present, VLCC quotations from the Middle East to Asia have reached: About 1.2 million US dollars per day, compared to around 30000 US dollars per day before the war. According to estimates, in extreme cases, logistics costs can already account for about 27% of the delivered crude oil price This also explains why the physical supply of crude oil in the Strait of Hormuz has recovered significantly, while Brent is still around $100. 4. There is another new restriction Kpler has made it clear that the ship to ship transfer operations in Aman Bay are approaching their capacity limit. Previously, ship to ship STS could complete one round in about 5-7 days. Some operations near Sohar have been ongoing for almost 10 days now. So now, monitoring oil prices is not just about monitoring the transportation in the US Iran Strait, but also about paying attention to the transportation costs involved! The transportation cost is currently the key variable determining the level of oil prices! These five indicators: Daily Hormuz VLCC actual throughput Sohar/Fujairah STS (Ship to Ship Transfer in Sohar/Fujairah) throughput Shipment volume of Saudi Ras Tanura Yanbu/East West Pipeline flow rate VLCC daily rent. ” It is better to tell us whether the real supply has deteriorated again than just looking at the news headline of 'whether the strait is closed'. This article is sponsored by @ bitget_zh, "Bitget Buying US Stocks: Instant Entry, Smooth Trading