UBS Research: In the past week, the daily flow through the Strait of Hormuz exceeded 6 million barrels.

The tensions between the U.S. and Iran continue to persist, but market focus is gradually shifting from military risks to economic sanctions and their impact on the global oil supply landscape. According to Xinhua, U.S. Treasury Secretary Steven Mnuchin stated on the 20th that the Trump administration would intensify economic pressure on Iran and threatened to impose "unprecedented economic isolation" measures on the country. He mentioned that the Trump administration's plan to severely damage Iran's economy could potentially eliminate the need for large-scale military action against Iran. As the sanctions are likely to escalate, their effects on Iran's oil exports are becoming a new variable of interest in the market. In the meantime, visible tanker traffic in the Strait of Hormuz remains significantly below pre-conflict levels, but "dark fleet" transportation is partially filling the gap. Research data from UBS indicates that overall oil flow through the Strait of Hormuz over the past week was slightly above 6 million barrels per day, with the dark fleet transport volume rising to about 5 to 6 million barrels per day, indicating that the actual volume of oil transiting may be less impacted than surface shipping data suggests. More noteworthy is that, as Irans supply continues to be restricted, other Gulf oil producers are rapidly restoring their crude oil loading levels. The market is not simply facing a sudden drop in total supply, but rather a reconfiguration of the regional oil supply landscape. Visible tanker traffic remains low According to UBS Evidence Lab data, the average number of oil and gas vessels transiting the Strait of Hormuz over the past two days was 4.0, up from the August average of 3.7, but still significantly below the July average of 6.4. Estimated by deadweight tonnage, Gulf export flow over the past two days was approximately 1.5 million barrels of oil equivalent per day, which is not only lower than the August average of 1.9 million barrels of oil equivalent per day but also far below the July average of 3.6 million barrels of oil equivalent per day. However, storage and loading data indicate that dark fleet transport volumes have risen to 5 to 6 million barrels per day over the past week, partially compensating for the decline in visible transport, keeping the overall transit volume through the Strait of Hormuz slightly above 6 million barrels per day. Similarly, vessel traffic through the Strait of Malacca is also below normal levels, but import and export flows toward the Red Sea have recently increased. At the same time, crude oil loading from other Gulf oil producers is clearly recovering. Over the past two days, the average crude oil loading volume from non-Iranian oil-producing countries in the Gulf region rose to 10.2 million barrels per day, far exceeding the previous two days' average of 3.6 million barrels per day, and also surpassing the July average of 4.5 million barrels per day. The seven-day average since August has already exceeded 6 million barrels per day, reaching a high since the conflict began. In stark contrast, Iranian crude oil loading remains at an extremely low level. During the same period, Iran recorded zero loadings, with an August average of only about 200,000 barrels per day, down from 900,000 barrels per day in July, and significantly below the normal range of about 1.7 to 1.8 million barrels per day. This indicates that the current Gulf supply is exhibiting a clear structural divergence: while Irans exports remain constrained, other oil producers are increasing their loading volumes, partially offsetting the supply gap. Energy supply still faces disruptions At the same time, the market's assessment of supply risks remains significantly informed by the multiple disruptions that regional energy infrastructure has faced previously. Some Gulf energy facilities and refining capacities were affected by attacks. Though some capacities have gradually recovered, related disruptions continue to keep the transportation of Gulf crude oil and petroleum products below normal levels. Consequently, the market's current focus has shifted from singular events to the capacity for supply recovery: on one hand, whether the new round of U.S. sanctions can further squeeze Iranian oil exports; on the other hand, whether other Gulf oil producers can continue to enhance supply and offset the gap left by Iran. If Iranian exports further contract, and replacement capacity is insufficiently released, the supply pressures in the crude oil market may continue to rise, with changes in transportation through the Strait of Hormuz also becoming an important observation window affecting oil prices. This article is compiled from "Wall Street Insights," author: Li Jia; GMTEight editor: He Yucheng.