"A 'workable system' of transit and shipowner confidence in the security of the transiting vessels is essential. This includes availability of insurance for transiting vessels, facilitating commercial trade financing, and sustained outbound vessel transits through the Strait of Hormuz."
"Laden vessels have every incentive to transit the Strait of Hormuz as quickly as insurance and security assurances allow, but it is unclear what rate of transits can be achieved safely."
"Ballasting vessels are unlikely to enter via the Strait of Hormuz any sooner than a 'just in time' logistics basis, at risk of becoming trapped if hostilities resume."
The restoration of 11 million barrels per day of oil production in the Middle East is contingent upon the normalization of export logistics. A functional supply chain, from extraction to shipment, is necessary for production levels to resume. Key factors include insurance for vessels, commercial trade financing, and sustained vessel transits through the Strait of Hormuz. Confidence in transit viability during ceasefires is crucial. As export volumes increase, storage capacity will enable upstream production and refining operations to restart.
Read at London Business News | Londonlovesbusiness.com
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