Overview
- The U.S. warning that it could keep a naval blockade of Iran indefinitely on Aug. 14 renewed fears that crude flows through the Strait of Hormuz will remain constrained and lifted near‑term supply risk.
- International Energy Agency data show July diesel exports from Russia, the Middle East and Asia fell by about 1.3 million barrels per day year‑over‑year and S&P Global estimates refineries processed roughly 7.5 million bpd less crude than a year earlier.
- U.S. diesel inventories are at their lowest for this time of year in about 30 years and the retail diesel average sits near $5.32 per gallon, squeezing the market that already relies on U.S. exports to fill gaps.
- Refineries are running at extreme levels with utilization commonly above 90–95% and the 3‑2‑1 crack spread climbing past $70 per barrel, which leaves little operational room to boost product output during maintenance season.
- Governments have tapped reserves and tightened trade tools — the U.S. SPR is at its lowest level since early 1983 — and analysts warn export curbs and refinery damage could keep product prices high even as demand forecasts temper crude prices.