Hormuz Talks Ease Oil Supply Fears, But Diesel Stocks Remain Tight
The Strait of Hormuz situation has eased some oil supply fears as Iran and Oman sign a revenue sharing agreement, while Qatar's prime minister visits Iran for further talks.
Hormuz accounts for about one-fifth of global consumption when at its normal capacity. However, current flows are less than a quarter of pre-war levels. A slight increase in shipments has been seen, but this is lower than the recent 10-day average.
The US Energy Information Administration reported mixed signals for inventory levels for the week ended August 21. Crude stocks increased by 100,000 barrels to 428.9 million barrels, while gasoline and distillate stocks decreased by 2.5 million and 2.2 million barrels respectively.
Diesel pools are depleted globally due to middle east refinery damage and Ukrainian attacks on Russian refining capacity, which has reduced global supply of distillates.