US-Iran tensions disrupt Hormuz shipping; markets price mixed prospects for reopening

Aramco CEO Eyes "Fourth & Fifth" Oil Export Routes To Break Hormuz Chokehold Brent crude futures climbed back above $104 a barrel early Thursday as Iran threatened to widen the Middle East conflict into the Indian Ocean and optimism surrounding yesterday's meetings between US and Iranian officials on the sidelines of the UN General Assembly faded. A focal point this morning is Nikkei Asia’s interview with Saudi Aramco CEO Amin Nasser, who said Aramco is studying additional crude export routes to bypass the Strait of Hormuz. Nasser said Aramco is conducting engineering and feasibility work on “a fourth and a fifth route” for crude exports. He did not disclose their locations. He warned, "This crisis is not really getting better. The situation will get worse because this interruption is significant. It's not a small interruption," adding, "I don't think things are getting better." The plan for two more oil export routes builds on the current three primary routes, one of which passes through the Hormuz chokepoint that Iran has disrupted. This comes after drone attacks earlier this month disrupted Saudi Arabia's East-West pipeline to the Red Sea, but media reports this week suggest the pipeline could restart soon at half capacity. "When people talk about the East-West [pipeline], they think it's one pipeline. It's not, it's multiple lines," he said. "It's not easy to interrupt all the lines at the same time. So it gives us the flexibility to respond and cater to our customers." Beyond the Hormuz chokepoint and the East-West pipeline, Aramco can move crude north through Egypt's Sumed pipeline to the Mediterranean, Nasser said. "People think about interruptions in Hormuz, interruptions in Bab-el-Mandeb, [but] we never stopped. We continue to supply our customers," he said. "The only thing you do [is] shift more vessels, one way or the other. ... We do have this multiple optionality that allows us to meet our customers' demand." Last weekend, Qatari Energy Minister Saad Al-Kaabi blasted Treasury Secretary Scott Bessent for saying he was "wrong" to claim that the Hormuz chokepoint would be "worthless" to the oil industry in two years.  "I think this is completely wrong," Saad Al-Kaabi said at the Qatar Economic Forum in New York. Speaking to Fox Business's Larry Kudlow on the sidelines of the Group of 20 finance ministers' summit in North Carolina earlier this month, Bessent said the Hormuz maritime chokepoint, in about "two years will be… a worthless piece of water," adding that oil "will be going on pipelines across land." 🚨𝗝𝗨𝗦𝗧 𝗜𝗡: 🇺🇸 Treasury Secretary Scott Bessent says “In 2 years, the Strait of Hormuz will be like a worthless piece of water.” pic.twitter.com/B94NIWtews — DustyBC Crypto (@DustyBC) September 1, 2026 Bessent has a point. Aramco's push for new export routes reinforces the outcome we first pointed out at the war's start: energy flows will reroute around Hormuz, gradually eroding Tehran's leverage. Iran's threat to widen the conflict may be an attempt to keep that leverage alive. And it won't be just the Saudis rewiring energy flows; it'll be all the Gulf allies with the capability to do so.  Tyler Durden Thu, 09/24/2026 - 07:45

Oil Holds Highs After Total Crude Stocks Rose, US Production & Gasoline Demand Dipped Oil prices reversed initial losses (Brent back above $100) on Wednesday amid persistent Middle East supply risks, as investors weighed the prospect of improved Saudi export flows and U.S.-Iran diplomacy against the potential for further disruptions. Saudi Arabia has begun testing its East-West pipeline for structural integrity and pressure, a step toward restoring oil flows after attacks knocked out the route earlier this month. Crude exports from the Red Sea port of Yanbu could restart within a couple of days if the tests are successful, The Wall Street Journal reported, citing people familiar with the matter. U.S. envoy to the Middle East Steve Witkoff said in a post on X that American officials engaged in lengthy talks with the Iranian delegation through mediators on the sidelines of the United Nations General Assembly. The mediators shuttled between the two sides throughout the day and completed a round of discussions that the U.S. hopes will prove constructive and promising, he said. Reports of fresh attacks this morning didn't help any diplomatic optimism, but expectations (driven by last night's API report) suggest crude stocks stabilizing while product stocks are drawing down... API Crude +1.8mm Cushing +2.1mm Gasoline -2.2mm Distillates -2.2mm DOE Crude +2.97mm Cushing +2.27mm Gasoline -1.69mm Distillates -428k Cushing stocks bounced off 'tank bottoms' and crude inventories jumped last week while product stocks both saw modest draws... The SPR saw a very modest 405k barrel drain last week - the second tiny drain in a row since the war began. Last week's sizable Crude build was enbough to offset the drain and create only the second weekly build in total crude stocks since early April... ...as the caves hit 'tank' bottoms.. The dip in US distillates stocks leaves it 15% below seasonal averages (and a record low for this time of year)... Crude production edged lower to 13.94 million barrels a day last week, down by 5,000 barrels a day from the previous week. The small drop came even as the number of rigs drilling rose for a third straight week, with another two units put into operation, according to Baker Hughes. The 4-week moving average for US gasoline demand slipped by 49,000 per day for the EIA week, but remains within seasonal norms... WTI was trading around $92 ahead of the official data and is maintaining those highs since... Bank of America raised its Brent forecast for the second half of the year to $95 a barrel from $83, citing the large disruption to crude and refined-product supplies. Continued skirmishes through year-end are now its most likely scenario, while alternative routes and escorted shipments through the Strait of Hormuz have mitigated some of the shortfall, Francisco Blanch of BofA Global Research said. Damaged infrastructure and geopolitical tensions make a rapid normalization unlikely, he added. Tyler Durden Wed, 09/23/2026 - 10:50

"Developments Can't Be Ignored" As Brent Tumbles On Iran Talks, Saudi Pipeline Restart Hopes: UBS Brent crude slipped below $99 a barrel, falling as low as $97.77 in the overnight hours, as renewed US-Iran diplomacy and prospects for restored Saudi oil exports eased supply concerns. But as Goldman Sachs energy experts warned on Tuesday, the global refining nightmare will persist through next year. The benchmark has slipped nearly 11% since mid-month after topping out around $109.65. Reports this week of a partial restart of Saudi Arabia's East-West pipeline and Asian buyers being slated to resume cargo loadings at Yanbu offered some relief to a tight physical market.  Full East-West pipeline repairs could take as long as two months, according to local reports. Even limited operations would ease the immediate supply squeeze. President Trump said US officials held "very good" talks with Iranian representatives at the United Nations General Assembly in New York on Tuesday. Special envoy Steve Witkoff and Jared Kushner participated in the three-hour talks with their Iranian counterparts on the sidelines of UNGA. "I feel very good right now," Witkoff said after the meeting. He wrote on X late Tuesday that the US hopes the talks "will prove constructive and promising" and the mediators will continue their work.  UBS energy specialist Dominic Ellis provided clients with a full view of what's driving energy markets so far this week: Brent is below $99/bbl, down about 3.8% from Tuesday's high and down under 10% from the $109/bbl hit early last week, as evidence emerged of debottlenecking of Middle East oil exports and of diplomatic progress between the US and Iran. Saudi Arabia said that flows via the East-West pipeline could partially restart in coming days, and that exports from the port of Yanbu would also restart soon. Full repairs to the pipeline could take up to 8 weeks according to press reports, but even a partial restart would alleviate some of the immediate tightness in oil markets.  Meanwhile, Iran acknowledged that there had been discussions with the US via intermediaries on the sidelines of the UN General Assembly in New York, and said it had shared conditions for a restart of transit via the Strait of Hormuz, which it said could happen in 7 days if conditions were met. President Trump called US talks with Iranian envoys "very good".  Cynics will note that similar comments from the US in the recent past have not resulted in meaningful progress towards diplomatic goals, and that the US has already rejected calls for an immediate end to its blockade of Iran – one of Iran's preconditions for an easing of restrictions on the Strait of Hormuz.  Still, the fact that talks are taking place at all is a development which cannot be ignored, and which is likely to keep downward pressure on oil prices until there is evidence that progress has stalled. On the other hand, a breakthrough in talks could push Brent back into the $80s fairly quickly.  The desk's base case is that the US has a strong incentive to rely on the "carrot" rather than the "stick" in the period leading up to midterm elections in November.  Reports on Tuesday that President Trump has made comments supportive of a US diesel export ban (despite Interior Secretary Burgum's statement last week that a ban would not likely have the desired effect) show he is growing concerned about elevated fuel prices in the US, and a focus on diplomacy with Iran may be the easiest way to bring oil and refined product prices down in the near term.  In the medium term, however, Iranian conditions are not likely to be acceptable to the US, and we would not be surprised at a return to the low-level conflict we’ve seen over the last month. Crude's retreat from triple digit territory is easing pressure at the pump, with AAA data showing the national average for regular gasoline slipping to $4.474 a gallon on Wednesday. But after a 9.3% surge this month, a modest pullback offers limited political relief for the Trump administration. Prices remain well above the politically sensitive $4 threshold, leaving the White House under pressure to turn diplomatic progress into a concrete deal. Refer back to Goldman energy analyst Nikhil Bhandari's Tuesday note about the prolonged refining crisis and what it means for gas and diesel prices in 2027 (read here).  Tyler Durden Wed, 09/23/2026 - 07:45

Saudis Signal Red Sea Oil Loadings Could Soon Resume For Asian Buyers Bloomberg reports Saudi Aramco may restart crude loadings at Yanbu this week, raising hopes that the critical East-West pipeline route, which bypasses the Strait of Hormuz, could resume operations at half capacity after a drone attack disabled it. While no restart timeline has been confirmed, the overnight development adds to positive signs of progress toward resolving the global energy crisis after Brent slipped below $100 a barrel on reports that Iran offered to reopen the strait in exchange for an easing of US naval pressure and the US blockade of Iranian ports. However, Iran's semi-official Fars News Agency has denied reports from Kyodo and Reuters about reopening Hormuz, calling them "invalid and untrue." The report also said Aramco executives told at least three Asian refiners they could soon resume picking up crude at Yanbu on the Red Sea. Loadings at the Red Sea port have been halted since drone attacks launched from Iraq struck an East-West pipeline pumping station on September 10. The route had been carrying about 4 million barrels a day, providing Saudi Arabia with a valuable bypass around the Hormuz chokepoint. Some Asian and European buyers have already missed their loading dates, leaving vessels near Yanbu or still heading toward the port. The Saudis have ramped up crude tanker transits from Ras Tanura through Hormuz, with cargoes available for ship-to-ship transfers in the Gulf of Oman. Despite this morning's encouraging reports, Barclays analyst Amarpreet Singh warned that Brent prices may need to climb another 50% to bring supply and demand into balance if current disruptions persist. Inventory and consumption indicators suggest "prices have a long way to go before supply and demand converge," Singh wrote in the note. He pointed out that net Middle Eastern supply losses have narrowed to an estimated 4.7 million barrels a day, down from 12 million to 13 million at the start of the war. But months of disruption have left the market with inadequate buffers to protect against another big supply shock. Singh forecasts Brent at $95 a barrel in the fourth quarter of 2026, followed by $90, $85, $85 and $80 across the four quarters of 2027. The potential 50% increase represents an upside scenario if disruptions continue. Separately, UBS analyst Joe Dickinson told clients earlier that "Trump's approval ratings hit new lows and public Republican dissatisfaction continued to build ahead of the midterm elections. Polymarket is now pricing a 65% probability of a Democratic clean sweep, adding pressure on Trump to deliver tangible progress in negotiations over the conflict in the Middle East." Tyler Durden Tue, 09/22/2026 - 09:25

Iran's Fars Calls Reuters' Hormuz Reopening Story "Invalid" Ahead Of Trump's UN Address Update: Iran's Fars Rejects Hormuz Reopening Reports As Brent Slides <$100 On Diplomatic Hopes Brent Tumbles On US Media & Aligned Outlets Pushing Rumored Diplomatic Efforts  Iran's Fars Rejects Reporting  Kyodo and Reuters published positive diplomatic headlines early Tuesday morning that sent Brent crude futures tumbling below $100 a barrel, but Iran's semi-official Fars News Agency denied them. Kyodo and Reuters, citing Iranian sources, reported that Tehran could reopen the Strait of Hormuz within seven days if Washington eased US naval pressure on the Hormuz chokepoint and lifted its blockade of Iranian ports. Fars called those two reports "invalid and incorrect." Despite Fars' rejection of the reporting, US media and aligned outlets focused this morning on rumored diplomatic efforts to resolve the conflict ahead of President Trump's United Nations General Assembly address later today. Brent crude remains below $100. Brent Tumbles Below $100 After Report Says Iran Offers To Reopen Hormuz Chokepoint Brent crude futures tumbled early Tuesday, as much as 3%, and slid below the $ 100-a-barrel level to the low $98 range after reports that Iran offered to reopen the Strait of Hormuz within one week if the Trump administration begins easing naval pressure in the critical waterway and ends its blockade of Iranian ports.  Tehran conveyed the proposal through intermediaries as part of efforts to revive negotiations and end the conflict, Kyodo News reported, citing a senior Iranian government official.  The offer calls for the US naval blockade of the critical waterway and Iranian ports to end in exchange for reopening the strait. This comes as Treasury Secretary Scott Bessent's economic war against Tehran has ramped up (read latest).  Here's more from the Japanese outlet: The proposal, which has already been conveyed to Washington through mediators, calls for renewed talks aimed at reaching a permanent end to hostilities between the two countries, the official said. Tehran plans to use the U.N. General Assembly gathering this week in New York to consult with countries acting as intermediaries. The official ruled out a meeting between Iranian President Masoud Pezeshkian and U.S. President Donald Trump on the fringes of the gathering, but said progress toward an agreement remains possible. "There is a possibility of moving toward an agreement," the official said, while adding that Washington must demonstrate "seriousness and commitment" if diplomacy is to advance. Iran is seeking signs from Washington that it is prepared to return to negotiations and take steps toward an end to the U.S. military blockade of Iranian ports and a halt to military operations related to the Strait of Hormuz, the official said. If such steps are taken, Iran is prepared to reopen the strategic waterway within seven days and return to the negotiating table, according to the official. Hamad Hussain, senior climate and commodities economist at Capital Economics, was quoted by Reuters as saying this overnight development is a positive sign that diplomatic efforts may be working. "There may also be other obstacles, such as the issue of tolls and fees, to overcome before a lasting solution can be achieved," Hussain added. Later this morning, President Trump will address the United Nations General Assembly and meet with world leaders, likely discussing the Gulf conflict and Russia's war in Ukraine. Despite another exchange of threats between Washington and Tehran on Sunday, Trump said he was open to meeting Iranian President Masoud Pezeshkian this week at UNGA. An Iranian official subsequently told Reuters that no direct meeting would take place.  Diplomatic movement appears to be happening under the surface to resolve the US-Iran conflict and the global diesel crisis. However, Ole Hansen, head of commodity strategy at Saxo Bank, does not expect much downside in Brent prices until transits through the maritime chokepoint increase, particularly shipments of refined products, where the real energy crisis lurks ahead of the Northern Hemisphere winter. Tyler Durden Tue, 09/22/2026 - 07:47

Oil fell Monday, settling near $100 a barrel, on signs Saudi Arabia is boosting exports via the key Strait of Hormuz and fresh hopes for diplomatic progress in the Iran war. Brent, the global benchmark, declined for a fourth session, settling 3.4% lower. The October West Texas Intermediate contract, which expires on Tuesday, fell about 4.5%. Satellite data showed that Saudi Arabia’s observed oil loadings from inside the Persian Gulf jumped over the weekend, with the highest number of ships seen at the nation’s main Persian Gulf port since June. The images indicate that the kingdom is successfully redirecting its exports back toward the Gulf following the shutdown of its vital East-West pipeline due to drone attacks.  For more, we speak with Humayun Tai, Global Leader of Energy & Materials at McKinsey. (Source: Bloomberg)