Oil Oversupply Risk Returns as Hormuz Flows Recover, Non-OPEC Exports Hit Record High, Vortexa Says

The recovery in OPEC crude flows through the Strait of Hormuz, combined with record-high non-OPEC exports, is raising the risk of global oil oversupply. by Vortexa. Xavier Tang, a Vortexa senior market analyst noted that seaborne crude and condensate liftings through the strait increased for a second consecutive week ended July 5, with Saudi Arabia and the UAE boosting exports, with the latter already reaching pre-war export levels. Non-OPEC crude exports have surged to a record 28.5 million barrels per day in June, driven by US Strategic Petroleum Reserve releases, higher Brazilian production, and increased shipments from Russia, Guyana, Kazakhstan, Canada and Norway. Tang warned that if OPEC exports return to pre-conflict levels while non-OPEC supplies remain high, the global seaborne crude surplus could reach 3 million bpd, compared to a 12 to 14 million bpd deficit from March to May, at the peak of the Hormuz crisis. The report also noted that a recovery in Chinese crude demand will be critical to absorbing the additional supply, with subdued buying from the world's largest crude importer now the biggest obstacle to a sustained rebound in oil.