The Ketchup Effect on the Oil Market. Prices Return to Pre-War Levels

The price movement is linked to the situation around the Strait of Hormuz, one of the key routes for transporting oil from the Persian Gulf. Schieldrop points out that over the past week, ship traffic in the Strait has been largely open, and macroanalyst Joel Lundh from Nordea Markets told E24 that the number of vessels passing through the area is steadily increasing. Oil that had previously accumulated in the region is now reaching the market.

According to Schieldrop, the current price level is quite normal. Before the outbreak of war in Iran in February, oil was priced similarly. The analyst notes that stocks had accumulated in the Persian Gulf, and now this oil is starting to reach the market.

Additionally, oil from strategic reserves is still flowing in. Schieldrop talks about the 'ketchup effect' from the Strait of Hormuz, which increases supply after a previous stagnation. In his opinion, this is weighing on prices. However, the analyst notes that he does not know how deep the current decline will be.

High prices had previously limited demand. Schieldrop believes that lower prices could stimulate it again, especially when Chinese oil imports and consumption in areas where it had weakened return. Additionally, there is a need to rebuild strategic reserves. Such a scenario could strengthen prices.

The analyst therefore expects a rebound when the ketchup effect starts to fade. At that point, supply from the Strait of Hormuz may stop putting so much pressure on the market. At the same time, shipowners remain cautious. Schieldrop emphasizes that normalization of traffic depends on predictability.

Several ships linked to Norway have left the Persian Gulf in recent days. Among them was the bulk carrier Banastar, owned by the Oslo-listed company Klaveness. Schieldrop adds that restarting petrochemical plants in the region could take up to two months.