Crude Supply Chains Fracture as Hormuz Risk Reshapes Flows

Saudi Arabia's crude exports jumped 7.9% month-on-month to 4.451 million bpd in August, the highest since March, even as production fell to a record-low 6.24 million bpd, JODI data shows. The divergence signals Riyadh is drawing down inventories to meet demand while managing output discipline.

India's Indian Oil Corporation plans to trim its Middle East term purchases for FY2027/2028 from an initial 47% allocation, citing regional supply uncertainty. Meanwhile, Russia's Northern Sea Route shipments have surged nearly 50% year-on-year, with shadow fleets rerouting roughly 20 million barrels to Asian buyers bypassing Hormuz and Bab al-Mandab chokepoints.

US commercial crude stockpiles fell 3.1 million barrels for the week ending October 16, landing at 412.5 million barrels—3% below the five-year average, reinforcing a tightening physical market backdrop.