US ExxonMobil expects that it will take up to two months for stable oil flows to return to the market after the opening of the Strait of Hormuz, Chief Executive Officer Darren Woods said during a conference call.
“Once the strait reopens, it will take some time to return to stable flows consistent with what we have seen in the past. Ships have to adapt. We have to deal with the slowdown. Also, obviously it takes time to get to market with product. "Therefore, we expect there to be a one to two-month delay between the actual opening and the resumption of normal market flows," he said.
According to him, the market has not yet fully felt the impact of the closure of the Strait of Hormuz. In the first month of the conflict, large volumes of oil were still in transit, strategic reserves were deployed and commercial stocks were reduced, which helped to mitigate the impact on the market in March. As oil stocks decline, this important market leverage will be lost, Woods noted.
“And so we expect that when that happens and the strait remains closed, we will continue to see rising prices in the market,“ he stressed.
When the Strait of Hormuz reopens, governments and companies will try to replenish their oil reserves, and those countries that do not have strategic reserves will consider the need to create them, according to the head of ExxonMobil. He believes this will lead to increased market demand, which will put pressure on prices.
Meanwhile, Japan has purchased a shipment of Russian oil amid the escalating situation around Iran and the closure of the Strait of Hormuz, through which the country usually receives almost all of its oil supplies from the Middle East, which accounts for 95% of its total imports.
This was shown by an analysis of monitoring data confirmed by the importing company.
The Omani-flagged oil tanker Voyager is currently sailing off the southern coast of the Japanese island of Kyushu. It is expected to arrive at the port of Kikuma on the island of Shikoku, where Taiyo Oil's refinery is located, on May 3.