In many areas of life, the true answer is it is complicated. This helps explains oil prices because on a simple terms, if the war between the US and Iran was over and the tankers moving goods including oil through the Strait, that should lead to fall in oil prices. Oil is moving through the Strait but oil prices have not fallen, why?
In an article by Peter Eavis of the New York Times News Service, according to oil analysts, oil tankers moving oil are getting back on track. In September, an average of 10 million barrels of oil moved through the Strait on a daily basis according to Klper, a firm that tracks oil tankers. In addition, 6 million barrels of crude a day has left the Persian Gulf states by pipeline.
Before the war, the average was 19 million barrels of oil left the region daily.
Despite the success in getting more oil out, the per barrel price is still well above where it was before the war.
Even with the recovery in Gulf oil exports, the global supply is below what the world needs, says Dan Pickering, chief investment officer for Pickering Energy Partners, a financial services firm based in Houston.
The 10 million barrels is an improvement, but below the 16 million barrels before the war.
The strait is not open to navigation, because it is not safe, Arsenio Dominguez, secretary general of the International Maritime Organization, a UN agency, according to the group 85 ships have been attacked and 24 martiners have died.
The 3 big names of tanker tracking are Kpler, Vortexa and TankerTrackers.com. In August the numbers were 5.9 million, 6.4 million and 5.5 million respectively. A very large tanker can carry 2 million barrels of oil.
The good news is oil is moving however not at the same rate it was before the war. In addition, the US Navy has a large presence in the region and is that sustainable?
Linking to dividend paying stocks, similar to most things in life, it is more complicated than it looks, but there are some metrics to the seen. It is relatively easy to make a profit – Sales Price is higher than cost of goods. However, to make a profit, you need to have consistency and relatively stable markets. When you buy a profitable company, you always want to know how the company makes it money that leads to profits and how consistent it is. What seems simple is actually complicated, but when profits come every year, it feels simple.
There are more questions than answers, till the next time – to raising questions.
