Brent falls $3.02 to $97.67 after $10 weekly gain as Saudi Red Sea loadings drop 41%
Brent settled down $3.02 at $97.67 after touching $102 the day before, and both Brent and WTI still added about $10 a barrel over the week. On crude cost alone that is roughly 24 cents a gallon added to your replacement cost in five days, before anybody's margin. The driver is the same one that has been running the tape since June: the Strait of Hormuz and Bab el-Mandeb are both disrupted at once, and there is no cheap way around either.
Yanbu loadings
Saudi Arabia moved nearly all of its export barrels to the East-West pipeline and out through Yanbu on the Red Sea when the Iran war started. That outlet is now shrinking. Wood Mackenzie vessel tracking puts June loadings at about 2.39 million bpd, down 41% from the 4.07 million bpd March peak and 66% below total Saudi export levels.
The Houthis announced a blockade on Saudi shipments and hit vessels off Yemen this week. At least one Greek-owned tanker carrying Saudi crude, the Merbabu, went through Bab el-Mandeb with its transponder switched off. When owners stop broadcasting position to get cargo through, insurance and freight follow, and those costs land in the delivered price of every barrel that competes with the ones you buy.
US crude exports
Asian and European refiners are chasing seaborne US crude, and that interest looks likely to stay strong while Middle East barrels are stuck. For Gulf Coast refiners that means bidding against export buyers for the same domestic supply, which supports WTI and squeezes the crack. Watch rack diesel first if that keeps up, since distillate is where the export pull bites hardest.
Angola and Venezuela
One Indian refinery executive told the Economic Times they had diversified sourcing outside the Strait of Hormuz, including two new grades from Venezuela and Angola. Chinese refiners bought up every August-loading cargo from Russia's Kozmino port weeks earlier than usual, and ESPO's discount to Brent narrowed to $1 from $3 to $4 two weeks ago.
ADNOC is still selling. Reuters reported Friday that the company issued its seventh crude tender since the start of June, with bids due by the middle of next week for August through October loading, both inside and outside the Persian Gulf. ADNOC is estimated to have sold more than 74 million barrels since June.
What to watch
Whether Yanbu loadings stabilize in July or keep sliding. Whether the ADNOC tender clears at a discount, which would say something about how buyers are pricing Hormuz risk. Crude could ease if shipping through Bab el-Mandeb normalizes.