There may finally be some good news on the inflation front.
Middle East crude oil exports have returned to roughly prewar levels despite continued disruption from the U.S.-Iran conflict, according to The Wall Street Journal.
J.P. Morgan analysts said the region’s 10-day average crude exports reached 17.5 million barrels per day — about 98% of prewar levels. Goldman Sachs estimated Persian Gulf producers shipped around 19 million barrels per day during the latest week.
The recovery has been driven by alternative pipelines, ports and ship-to-ship transfers as Gulf producers reduce their reliance on the Strait of Hormuz.
As Kpler analysts told the Journal: “Each time, barrels shifted routes.”
That is encouraging for inflation.
A more reliable supply of crude could help contain oil prices, lowering pressure on transportation, manufacturing and eventually consumer prices.
But the situation is not fully normalized. The Journal noted that exports of refined products such as diesel, gasoline and jet fuel remain well below previous levels, while geopolitical risks remain elevated.
Bottom line: oil supply is looking healthier. If that eventually pulls energy prices lower, markets may finally get some help on inflation.