Crude at sea hits record 1.28 billion barrels as deliveries lag

The amount of crude oil bobbing around the world's oceans just hit a record. Global crude in transit has climbed to 1.28 billion barrels, an all-time high, according to the Kobeissi Letter.

The jump is steep: the figure has surged by 180 million barrels in just the last several weeks. That's a lot of oil floating on water, and none of it is sitting in a refinery tank where it can be turned into fuel.

Two things are driving the pile-up. Middle Eastern flows are recovering through the Strait of Hormuz and along alternative routes, per the Kobeissi Letter, while ship-to-ship transfers keep cargo on tankers for longer stretches than usual.

The routes themselves are also stretching out. Importers diversifying away from the Middle East are booking longer voyages, and longer voyages mean more crude tied up aboard ships at any given moment.

That's the twist: exports are recovering, but the oil isn't arriving on schedule. With more barrels stuck at sea, near-term supply to refiners tightens even as tankers keep loading up.

The Kobeissi Letter's read on it is blunt — oil is flowing, but timely delivery is becoming the bottleneck.