Hormuz oil shipments at prewar levels but fuel shipments constrained

Crude oil exports from the Strait of Hormuz have basically returned to levels normal before the Iran war, as U.S. military escorts have boosted shipments and pipelines have redirected flows.

Crude transiting Hormuz reached a seven-day average of 13.5 million barrels per day as of Monday, which matches a prewar baseline for shipments through the strait, according to data published Wednesday by Kpler, a firm that tracks tankers and global trade flows.

Iran has claimed throughout the war that it controls Hormuz and has declared the closure of the strait multiple times. But Tehran is losing its influence as strong volumes pass through Hormuz, said Matt Smith, director of commodity research at Kpler.

Crude oil shipments from the Middle East region, including the Persian Gulf and Red Sea, are sometimes higher than prewar levels. The region reached a seven-day average of 19.5 million bpd as of Monday, surpassing a prewar baseline of about 17 million bpd, the Kpler data showed.

But the recovery is uneven, said Natasha Kaneva, head of global commodities strategy at JPMorgan. The “crude market has largely normalized even as refined product supplies remain constrained,” Kaneva said.

The world faces a global fuel crisis as supplies from the Middle East are constrained and Ukraine pounds Russian refneries. Refined products shipped through Hormuz are at a seven-day average of 677,000 bpd as of Monday compared to 3.6 million bpd before the war, according to Kpler.

Crude and product shipments together stood at a seven-day average of 14.2 million bpd which is about 80% of the Hormuz prewar baseline of about 17 million bpd, the data showed.

The global fuel supply shortfall has pushed diesel prices in the U.S. to record highs, which poses a major threat to health of the economy. President Donald Trump is considering an export ban as he faces political pressure from Republican lawmakers ahead of the midterm elections.

“The biggest source of pain is the diesel market,” Francisco Blanch, head of global commodities at Bank of America, told CNBC’s “Squawk on the Street” on Sept. 8.

Iran exports crater

Iran’s own crude oil exports, meanwhile, have cratered as the U.S. Navy blockades the Islamic Republic, according to Kpler data. President Donald Trump is trying to force Tehran into a settlement by shutting down its main source of revenue. The U.S. has also ramped up its sanction campaign.

Treasury Secretary Scott Bessent told Fox News on Sunday that Iran will make its final crude deliveries to China in about two weeks, leaving them with “nothing left to trade for anything.”

“There are some in Washington who say, let the blockade do its work — we can wait out Iran,” Helima Croft, head of global commodity strategy at RBC Capital Markets, told CNBC’s “Power Lunch” on Sept. 25.

But there is no hard evidence that U.S. economic pressure will fundamentally change Iran’s positions, Scott Modell, CEO of Rapidan Energy and a former CIA…