Oil Prices Toward $70/bbl 'Fundamentally Justified,' Vortexa Says

The recent decline in oil prices toward the $70-per-barrel mark is "fundamentally justified" based on a supply-and-demand balance, energy and shipping analytics provider Vortexa said on Friday. While the effective closure of the Strait of Hormuz has triggered supply losses of around 18 million barrels per day, rerouting of supplies and additional production from other regions have resulted in only 5 mmbbs/d of shortfall in the last three months, according to Vortexa's analysis. "China has been absorbing the biggest portion of the loss of supplies and has not been procuring extra barrels from the spot market which has kept pricing pressure away," the firm said. Vortexa projects that China's crude demand will not fully recover and will just remain between 1 mmbbl/d and 1.5 mmbbs/d below the 2025 average in H2, "driven by a structural shift in motor fuels demand." In June, the country's crude oil imports dropped for a fourth consecutive month, with seaborne crude arrivals falling to just over 6 mmbbls/d, the lowest level since at least 2016. The firm highlighted that growth in alternative energy supplies, such as natural gas, coal, and electricity, has.