Hormuz crude traffic near 76% of prewar pace; diesel remains scarce.

Crude traffic is recovering while refined products remain scarce, a divergence that points to a market in which oil prices could soften even as diesel stays costly, keeping refinery margins and diesel crack spreads elevated. That benefits refiners with working plants, particularly in the US, and puts more pressure on governments facing fuel-driven inflation. Extra Saudi exports enlarge crude supply but will not ease product shortages until Asian refiners lift fuel exports. Renewed Iranian attacks on vessels are still the key upside risk for crude and diesel alike, with slim inventories leaving little room to absorb further disruption.

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Earlier:

• Tax-free red-dyed diesel made available to all buyers by Trump order as fuel costs bite
• Trump's red-diesel order unlikely to trim most pump prices, says GasBuddy's De Haan

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The tankers have returned to Hormuz, but they are carrying the wrong kind of cargo, and the global diesel shortage will not ease until the Gulf's damaged refineries are running again.

Summary:

• According to Kpler, Hormuz crude flows averaged roughly 10.3 million barrels a day in the seven days through Saturday, about 76% of the prewar baseline.
• The WSJ (gated) says refined products accounted for just 11% or so of flows, versus more than 20% before the conflict.
• Diesel stays hard to find because of Gulf refinery damage and restrained fuel exports from Asia, making the US a major supplier.
• American diesel reached a record near $6.50 a gallon last month, and analysts do not expect a full recovery until well into 2027.
• Saudi Arabia's crude exports climbed to about 7 million barrels a day in September, twice August's level, although fresh Iranian strikes on vessels remain a threat.

Crude is again traversing the Strait of Hormuz in volumes close to those seen before the war, but very little of the diesel and other refined fuels that are in short supply is accompanying it, the Wall Street Journal reports.

Kpler's figures put the strait's average crude flow at around 10.3 million barrels a day over the seven days ending Saturday, roughly 76% of the prewar norm. Refined fuels like diesel and gasoline moved at only about 1.3 million barrels a day, about 11% of total flows, versus above 20% in the prewar period.

That gap stems from refineries across the region having been knocked out. The Journal reported that plants in Saudi Arabia, Kuwait, the United Arab Emirates, Iraq and elsewhere have stayed offline following missile attacks and other wartime outages. Most of the crude now leaving the Gulf is bound for Asia, with arrival expected in roughly a month, yet large refiners in China, Japan and South Korea are keeping most of their fuel production at home instead of shipping it abroad.

That leaves the US among the few large suppliers of refined fuel in a tight global market. At the end of last month, the national average diesel price hit a record around $6.50 a gallon, while California prices reached roughly $8.40. Analysts cited by the Journal said a full recovery is unlikely before well into 2027 even if current crude flows are maintained, since repairing oil fields and refineries and replacing the hundreds of millions of barrels lost will take time.

The Trump administration has been leaning on allies for help. On Friday, Group of Seven economies agreed to release 100 million barrels of crude and fuel from emergency reserves, but held back from restricting exports of diesel and other products.

The Journal reported that US oil executives have pressed the Navy to give priority to escorting diesel-carrying product tankers rather than the huge crude carriers that have received most protection so far. Each of those very large crude carriers can hold about 2 million barrels, roughly twice the capacity of the largest fuel tankers.

Saudi crude shipments have also recovered strongly, with Kpler putting September exports at about 7 million barrels a day, double August's figure, as the kingdom loaded cargoes from both the Gulf and the Red Sea. The jump, analysts said, may show rising confidence in maritime security or an attempt to maximise sales ahead of any renewed escalation.

Risks remain. In recent days Iran has again struck ships near the strait, a development that could stall the recovery in traffic, even though data so far still show tankers moving through in large numbers.