Hormuz Oil Flows Recover

**Bissi Adibayo** (0:01)
More oil is making its way through the Strait of Hormuz. It's World Business Express from the BBC World Service. I am Bissi Adibayo. Also, will Meta's new restrictions actually make children safer online, and drought forces France to relax its rules for making some of its famous cheeses?
So, we are seeing more oil passing through the Strait of Hormuz despite the continuing war in Iran. And traders say Kuwait and Qatar have increased shipments through the waterway, joining other Gulf producers using their own tankers or transferring oil between ships to keep supplies moving. Around 7 to 8 million barrels a day are now getting through roughly 3 quarters of pre-war levels. Rico Loemen is Senior Economist for Transport Logistics and Automative at ING Research.

**Rico Loemen** (0:56)
To be honest, it's quite remarkable that they managed to get through so much oil. Much of it is actually moving under the radar because the official statistics just refer to very limited transits on a daily basis.
And so many ships turned off their transponders or went dark. And that's why there's more moving than the outside world actually notes.

**Bissi Adibayo** (1:23)
We're talking about oil flows. They're now back to around 3 quarters of pre-war levels. So is that a sign that shipping companies are becoming more confident about using the strait?

**Rico Loemen** (1:35)
Yeah, there's a lot of confusion and different signalling on the shipments through the Strait of Hormuz. Just at the start of this week, there were reports about a complete standstill. Well, clearly, that's not the case, and it hasn't been the case over the last couple of months. We're now seeing a clear relaxation of the oil market as well over the last two days. So this is a sign that oil flows keep hold to a certain extent. Why does this happen? Well, there's also workarounds in place. So it's a matter of transit through the strait, but it's also a matter of using pipelines more intensively.
And there's even been reports on using other ports on the Mediterranean side.

**Bissi Adibayo** (2:21)
And what about insurance, which also remains a big issue?

**Rico Loemen** (2:25)
There's absolutely a problem for some shipping companies, right? So insurance premiums are still high at the moment. There's obviously a very high security risk still in play. So it comes to freight rates and also charter rates for tankers. Well, if you look at these rates, they're still very high. So that may force some companies to just continue and to take the risk.

**Bissi Adibayo** (2:48)
And if we're looking at the longer term now, could this then push Gulf producers to perhaps invest more heavily in alternative routes so that they are less reliant on the Strait of Hormuz?

**Rico Loemen** (3:01)
Absolutely. I'm sure this will happen and continue. There has already been investigations into new pipeline infrastructure using different ports. For instance, also in countries like Syria, which may be remarkable, but I'm sure this will continue because Iran wants to continue its leverage over the Strait. And there has been reports about fees they want to receive for using the Strait of Hormuz.
So there should be more resilience for uses of the Strait. And then it comes to alternatives.

**Bissi Adibayo** (3:37)
Rick Allumen of ING Research there. So all of these developments around the Strait of Hormuz is also feeding into what we're seeing in the markets. Well, time to bring in Nicholas Hyatt, who is an investment analyst at Hargrove's Lands Down. Nicholas, are markets sort of becoming less worried about a major supply shock?

**Nicholas Hyatt** (3:56)
I think today's a really good illustration of the uncertainty that still exists around the Strait. So while oil prices have fallen over the week, Brent crude is actually up around 1% today and a little under $89 a barrel. And that's because markets are still worried about whether that higher level of oil flow can be sustained.

**Bissi Adibayo** (4:13)
Let's talk about NVIDIA's latest numbers, which have given tech stocks another lift. So does that in any way suggest that investors still have plenty of confidence in the AI boom after all?

**Nicholas Hyatt** (4:25)
Well, NVIDIA shares are up around 7.5% in early trading in the US, so definitely lots of confidence there. And I think it's guidance that's particularly impressive. The group expects revenue to rise around 70% next year, on top of 100% growth this year. That's really exceptional. I can't think of another company that's been able to sustain that level of growth at this scale.
And the only reason they don't think it's going to grow even faster is because they can't make enough chips to meet demand.