Hormuz Crisis Persists: Saudi Exports Under Fire Despite Diplomatic Efforts

The ongoing crisis in Hormuz has persisted despite diplomatic efforts to resolve the issue. Saudi Arabia's export routes are under fire, with attacks on tankers near Bab el-Mandeb and oil sites over the weekend. The kingdom's exports were already falling for three straight months before the blockade started, according to JODI data.

Refiners are scrambling to find alternative sources of crude, driving up prices for North Sea, West African, and Mediterranean grades. Aramco is offering cargoes through Egypt's Sidi Kerir terminal, but this adds time and cost. Russian crude discounts have disappeared, making every alternative barrel priced like a scarce one.

Pakistan and China reportedly explored restarting U.S.-Iran talks last week, but this did not deter the market from pricing in the reality of the Hormuz crisis rather than the spare capacity held by Saudi Arabia. Diesel margins are still running near record levels, and refiners will continue to buy crude as long as they can make a profit.