Global Strait Recovery Slow, Attacks Hit Russian Refinery

Tanker traffic through the critical Strait of Hormuz may never fully return to pre-war levels, Goldman Sachs analysts warned, a development with long-term implications for global oil flow patterns. According to a report from OilPrice.com, the investment bank said flows could only recover to about 70% of pre-war levels, or 13 million barrels per day, potentially by the end of July, with full production recovery not expected until October.

The warning comes as the U.S. and Iran signed a preliminary peace deal on Wednesday, June 17, which should see the Strait reopen. However, the prolonged closure prompted major Middle Eastern producers to permanently diversify their export routes. Saudi Arabia has ramped up flows via its East-West pipeline to the Red Sea to an average of 7.5 million barrels daily, while the UAE has left OPEC and plans new pipeline capacity to bypass the chokepoint. Iraq is also considering boosting flows via its pipeline to Turkey.

Current visible oil flows via Hormuz stand at just 1.3 million barrels per day, with an additional 1.6 million barrels per day moving from the Gulf of Oman on vessels with disabled trackers, OilPrice.com reported, citing Bloomberg.

In other global energy security news, Ukraine launched a record air attack on Moscow overnight, with drones reaching the Moscow Oil Refinery. The strike disrupted airport operations and forced the closure of several major roads in and around the Russian capital, Rigzone reported.

Separately, South African state-owned utility Eskom reported sustained improvements in grid reliability. The company has logged nearly 400 consecutive days without power interruptions since mid-May, even as winter demand escalates, according to Rigzone.

For Bakken operators, the persistent shift away from the Strait of Hormuz could solidify the competitive advantage of secure, stable crude from the United States. The ongoing diversification by Middle Eastern producers may lead to a more fragmented global market, potentially altering long-term price benchmarks. Meanwhile, continued geopolitical volatility, exemplified by the refinery attack in Russia, underscores the premium on production from politically stable basins like the Williston.