Friday, March 16, 2012


I have talked in the past about how conditions that would argue against an attack on Iran were changing, as well as some precursor actions that the West could take in advance of an attack to mitigate the fallout. One of those actions could be a massive operation to purchase crude oil, transport it out of the Gulf and store it either in the SPR or simply on tankers. I touched on this back in 2009
One of the major fears regarding taking any military action to halt Iran's nuke weapons program is that they will close the straight of Hormuz and crimp oil flows to a global economy struggling to recover. Well, there are many many complex considerations around this issue, but let me just ask, how many tankers just sitting around storing crude oil would be an effective neutralizer of this fear? Could the US and British governments ask the likes of Morgan and others to ramp up this activity so as to have, oh, 70, 80, 90 tankers filled up and sitting quietly just in case Iran got bombed and acted up in the Strait? Just asking.
Well, oil tanker rates have skyrocketed in the last few days, with Saudi Arabia's shipping arm (Vela) making a massive hire of ships (sub. req.) to take increased crude production out of Saudi to the US. Note that the US has not been taking in much if any crude from SA as of late.

Analyst Omar Nokta explains spot earnings have shot up from around $25,000 day to approximately $42,500 daily thanks to a flurry of fixing activity.

Nokta says Vela has been at the tip of the sword chartering nine VLCCs in the past week for runs out of Saudi Arabia for the US.

Is the economy really picking up that much that we need all this new oil? Maybe, but we also know that the one country outside of Israel that fears the rise of Iran the most is...Saudi. Hmmm.


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