Brent back above $100

Brent closed at $105.68 on Sep 14, about 40% above the $76 it traded at before the strait closed. It spiked to $126 in March, fell to $74 by Jun 30 on ceasefire hopes, then turned up again as tankers were attacked.

Gasoline up 54%

The US national average went from $2.81 in January to $4.33, peaking at $4.50 in May. Every month since March has averaged above pre-crisis levels, and the last week alone added 18 cents.

Diesel keeps setting records

Diesel was $3.72 in the last week before the war. By Sep 15 it hit $6.27, a sixth straight record and 68% higher. It broke the old June 2022 record of about $5.85 on Sep 4.

“Diesel prices have risen faster than gasoline prices as supplies of refined fuel have tightened.”

The pump, not the barrel

Strip crude out of the retail price and what remains covers refining, transport and retailing. Diesel's spread grew from about $89 a barrel in January to $161.90 on Sep 15, up roughly 80%. Gasoline's widened too.

“It helps explain why prices at the pump can keep rising even when crude gets cheaper.”

Europe's gas bill, doubled over

TTF stood near $27.80 on Sep 14, the highest since December 2022 and about 153% above pre-closure prices. Storage was at 48% in January against a 63% average, so Europe was buying spot LNG in the worst season for it.

Asia bids up the same cargoes

JKM reached the high $28s on Sep 10, its highest in about two and a half years and roughly 167% up. Damaged units at Qatar's Ras Laffan, about 17% of its LNG export capacity, may stay offline for three to five years.

Demand now exceeds supply

Before the war the world produced about 4 million barrels a day more than it used. Every month since has drawn on storage. August output fell to 100.1 million, with over 10 million barrels a day of Gulf production shut in.

“expects Middle East oil flows to remain below normal until 2027”

Half a billion barrels gone

The IEA counts 507 million barrels drawn from observed inventories since February, 95 million of it in August. Global commercial stocks are down 400 million year to date, and 32 countries released another 400 million.

A 44-year low

The US Strategic Petroleum Reserve held 415.4 million barrels when the war began. On Sep 4 it held 285.4 million, down 31% and the lowest since December 1982. Its December 2009 peak was 727 million.

“Oil is being released to help make up for supplies that can't leave the Gulf.”

The floors below it

The reserve crossed the 300 million line in the week ending Aug 7. On the lapse path of 1.35 million barrels a day, it reaches 250 million around Sep 30 and the 180 million operating limit by Nov 21.

“At about 300M barrels, some caverns risk damage and can't safely be refilled after a withdrawal.”

Three ways this goes

As of Sep 11 the model gives 10% to the corridor holding and traffic normalizing, 40% to a grinding standoff with Brent at $95 to $125, and 50% to a lapse into sustained closure with Brent above $130.

“These odds are based on judgment.”

What moved the odds

The 50% lapse figure came after the Saudi bypass pipeline was suspended and the Houthis took the whole Red Sea coast. An official restart would push it back down. Yanbu holds five to seven days of exports.

US refiners are maxed out

American plants have run above 95% of operable capacity every week since Jun 5, touching 98.0% in the week ending Aug 28, against 90.8% a year earlier. August fuel exports set a record 8 million barrels a day.

Everyone else is running less

Global refining peaked at 81.4 million barrels a day in August, 4.2 million below last year, and the IEA forecasts 2026 down 2.6 million against 2025. Barrels in the ground matter less than plants that can process them.

“stretched to the limit”

Russia's refineries are burning

Estimates of capacity offline run from over 20% to 54% after 21 plus strikes in August. Kirishi is halted, Ryazan's primary units are down since Sep 6, and 28% of Russian stations are capping sales.

“Moscow 90% out of AI-92”

The export ban calendar

Diesel exports are banned through Sep 30, jet fuel from Nov 30, gasoline and remaining diesel to Jan 31. Kyrgyzstan buys more than 90% of its gasoline from Russia and has about six weeks of reserves left.

People simply stopped buying

World oil use fell 4.3 million barrels a day below last year in May, about 4%. The IEA now sees 2026 demand down 2.5 million. OPEC still forecasts growth of 0.4 million, a 2.9 million barrel gap between them.

“Economists call this demand destruction”

Inflation, then higher rates

August producer prices rose 5.4% from a year earlier, with diesel up 24.1%. The 10-year Treasury yield touched 5.02% on Sep 15, its highest since 2007. Futures put a Sep 16 rate increase at about 86%.

“see the need for a hike if inflation doesn't cool”

Groceries arrive late

Natural gas makes ammonia, ammonia makes nitrogen fertilizer. Gulf to India tanker freight is up 411%, and European gas sits near €82 per megawatt hour. Judging by 2008 and 2022, food prices move over a year later.

Where it bites next

US East Coast diesel could drop below a month of supply by Sep 21. China's commercial stocks thin around mid October, Rotterdam diesel by late October, then Europe at the pump.

“The world's remaining stocks amount to about 26 days of flying.”