Saudi Arabia spent weeks finding ways around the Strait of Hormuz. Now it is starting to send tankers straight back through it.
Three VLCCs—Malaysia Prosperity, Algeria Prosperity and Singapore Prosperity—each loaded roughly 2 million barrels between August 12 and August 16. Six more VLCCs could load Saudi crude from inside Hormuz later this month, provisional Kpler data showed.
The next round may involve Saudi Arabia’s own ships
So it appears oil actually is going through the Strait.
All your Hormuz are belong to us.
US Energy Secretary Chris Wright told a very different story last week: The strait is open, and oil is flowing significantly faster than the market appreciates. He would know: The US military is right there, patrolling the water, escorting ships in and out of the strait, protecting them from enemy fire. The Navy provides the Department of Energy with detailed information about which vessels are moving through and when…
Or, at least, for the first time since the start of the war, some analysts on Wall Street might at least be willing to consider that the administration may be telling the truth about the state of the oil market. That could give the Trump administration significantly more leverage with Iran than previously believed…
Wright asserted that the seven-day average of oil flowing out of the Strait of Hormuz had increased to 9 million barrels per day…Wright said that on August 8, total oil coming out of the Gulf exceeded that 20-million-barrel mark.
DB2
He would lie, because that’s what this administration does.
Yesterday I saw the highest gas prices ever in Porto (since 2019) over 2€ a litre for the cheapest variety, equivalent to over $8.71 per US gallon.
The Captain
Interesting to note that they’re not sending their own owned tankers through it. Just those from other registries. If those get through, maybe they’ll think of risking some of their own.
I suspect the Iranians will play along, just long enough to ….
Even with crude hovering around $82 - $90 per barrel, prices 'round here have gone up too. I filled up at $4.79 per gallon the day before yesterday. If the strait is flowing, prices should come down…eventually.
I wonder what yesterday’s news will do to this plan:
Live map of the traffic (for those using transponders) :
Indeed. Relying upon transponder data is fooling oneself.
DB2
This is great news. Now five or six million barrels are going through the straits of hormuz a day compared to twenty million a day; and now at a cost to the US deficit spending of $890 million to $1 billion per day.
Good News! Keep up the great work.
Plus the 7-8 Mb/d via pipelines, plus increased productions from the rest of the world. Global oil production is only down a little over 5% from January. Russia/Ukraine also contributed to the decline. Global nat gas production is down less than 2% from a year ago.
DB2
Yet demand is inelastic and prices are set at the margins. That means even a 5% reduction without a corresponding decrease in demand, can account for the 35% increase in the price of oil YOY.
I’d go with ‘low elasticity’. Another thing to keep in mind is that oil was being over-produced in the months before the war. It is now almost in balance although the numbers for China are, shall we say, fuzzy.
In Mb/d:
Prod Cons 25-11 108 104 25-12 108 106 26-01 106 102 26-02 109 104 26-03 97 102 26-04 95 99 26-05 94 100 26-06 99 102 26-07 101 101
DB2
So oil being $60 a barrel was because it was overproduced? Is it your position that gas prices are where they should be then and oil should be over $80 a barrel even if not for the war in Iran?
Not sure the current pols in office (or the driving public) would agree with such a position.
Yes. The world was producing 2-4 Mb/d more than it consumed, and that was with large (massive?) Chinese purchases for their petroleum reserves. The surplus helped keep prices lower in 2026 than they would have been.
Here’s the EIA back in the first week in January…
Crude oil prices generally declined in 2025 with supplies in the global crude oil market exceeding demand. Crude oil inventory builds in China muted some of the price decline. Events such as Israel’s June 13 strikes on Iran targeting oil infrastructure periodically supported prices.
On a monthly average basis, the price of Brent crude oil declined from a high of $79 per barrel (b) in January to a low of $63/b in December, which was the lowest monthly average price since early 2021. The annual average price was $69/b, the lowest since 2020, even when adjusting for inflation…
In our most recent Short-Term Energy Outlook we estimate that global production of crude oil and liquid fuels outpaced consumption throughout 2025, with implied stock builds of more than 2.5 million barrels per day in the final two quarters of the year. These stock builds were the largest recorded since 2000, aside from in 2020.
DB2
IEA announces release of 400 million barrels of oil.
This was announced just days after Islamic Revolutionary Guard Corps (IRGC) issued formal declarations prohibiting unapproved passage through the straits. Already 300 million barrels have been released. Obviously the experts knew that Iran could keep the straits closed indefinitely no matter what military prowess The Americans possessed. Everyone I should say except the rambunctious turds jumping around in the white house.
The United States has released a quarter of the IEA 300 million barrels from the Strategic Petroleum Reserve.
And the best part? The United States is adding a billion dollars a day to the budget deficit for 2026 to get 5 million barrels a day through the Straits. Add to that 1500 Patriot interceptor missiles at $4mil each.
Keep up the Good Work
I am not asking if they would have been lower - that is not in question. You appear to be implying that they should not be lower - that oil was being, to quote you, overproduced - i.e more than either we need or more than should be produced.
If so, then the logic follows that you think gas should be as expensive as it is today, even without the current war.
I ask again, is that your position - that $4+ gas is where we aught to be?
Hawk, I don’t follow you here. The world was producing plenty of oil and prices were declining despite that dust-up in the Ukraine and the 12-day war in the Middle East and Chinese buying for its massive SPR. That ‘cushion’ has damped the changes in the price of oil. Note that we haven’t seen the $150 or $200 prices that were being thrown around earlier this year.
My position is that without the war prices would have continued to decline.
DB2
How the U.S. Navy Is Helping Get Oil Through the Strait of Hormuz
https://www.nytimes.com/2026/08/19/business/iran-hormuz-oman-us-navy.html
But since May, the U.S. military has played a crucial role in getting millions of barrels of oil through the strait, helping to keep oil prices from rising further. The operation stealthily shepherds tankers through the southern part of the strait on routes close to Oman…
Before the war, about 15 million barrels of crude oil a day went through the Strait of Hormuz. In July, tankers using U.S. protected routes transported around five million barrels of oil daily out of the Persian Gulf, according to analysts.
“It’s one of the surprising successes,” said Michelle Wiese Bockmann, a shipping analyst at Windward, a maritime analysis firm. “They have been extraordinarily effective in keeping that southern corridor operating, despite the attacks.”
DB2
And what is the cost to US taxpayers to run this great shepherd operation?
Daily operational costs
Munitions cost
Damage to regional bases
Cost of higher fuel prices
Need some input from the budget-conscious, those concerned about government spending and debt and deficits.
“It’s not the spending that matters, it’s who wants the spending.”
Is it a good thing to believe in the other politicians?
Deflation is the end of your investments. Along with many in your family losing their jobs.