Hormuz Traffic Collapse Sparks Global Oil Supply Fears

The temporary agreement between the US and Iran expired this week, leaving the oil market without a solution to ease the conflict in the Strait of Hormuz.

This waterway is crucial for global oil supply, with about one-fifth of global oil and gas supplies moving through it before the fighting began earlier this year. However, recent ship-tracking data has shown that traffic has been running at very low levels for weeks, with only seven commodity ships crossing the strait on Thursday.

The major Gulf producers remain limited by the restricted passage, while Iran's own exports are under pressure from a US naval blockade. Extra oil is moving through pipelines and routes outside the Persian Gulf, but these barrels are not filling the gap.

The situation has been further complicated by President Trump's statement that the US would begin an economic operation against Iran to force Tehran to abandon its nuclear program. Iran responded with its own warning, making a resolution seem less likely.

Despite this, refined products such as gasoline and diesel futures also finished higher on Friday, with September gasoline gaining more than $0.08 per gallon. This suggests that the products side of the complex is bidding for barrels alongside the supply trade, not just riding it.