Overview
- Renewed U.S. airstrikes on Iran and Iranian reprisal strikes have reduced confirmed tanker transits through the Strait of Hormuz and raised the threat to Red Sea routes, prompting traders to add a large geopolitical premium to prices.
- Global crude benchmarks climbed roughly 11–13 percent this week, sending Brent into the mid‑$80s per barrel and WTI near $80, while U.S. retail gasoline averaged about $3.9 a gallon and diesel topped $5.
- Roughly 2.1 million barrels per day of refining capacity remain offline after damage in the Middle East and strikes on Russian refineries, which has cut refined‑product output and widened gasoline and diesel shortages independent of crude flows.
- U.S. refineries are running near full capacity and exporting record volumes of fuel, which has pushed domestic gasoline stocks to multi‑year lows and sent refinery margins (crack spreads) to record or multi‑year highs.
- Markets are fragile because clearing ports and mines, insurer and shipowner reluctance, stranded tanker backlogs, and only time‑limited diplomatic windows mean any further escalation or route closure could trigger much larger price spikes and broader economic pain for consumers and supply chains.