Oil Narratives
Oil Narratives - Geopolitics
The MoU between the US and Iran has given way to exchanges in the Strait of Hormuz.
The conflict could now spread to the Bab el-Mandeb Strait.
Traders remain on edge over sudden reversals from jawboning or a diplomatic breakthrough.
A protracted conflict would threaten critically low US crude and product inventories, leading to a natural floor in flat prices.
Oil Narratives: Loss of global refining capacity
In July, refined products found themselves in the crossfire of two conflicts.
The Russia-Ukraine war has resulted in a direct loss of Russian refining capacity, forcing diesel export bans and gasoline imports.
The reignition of the US-Iranian conflict over the Strait of Hormuz, with contagion risk to the Bab el-Mandeb, adds further pressure on refined products, particularly the middle distillate complex.
