Oil Prices Held Firm Amid Persian Gulf Escalation

Oil prices remain elevated after recent gains due to escalating tensions in the Persian Gulf. Despite Iran firing missiles into neighboring countries, oil exports from Iraq picked up in August, with a total of 2.35m b/d shipped out.

The Strait of Hormuz flows have continued uninterrupted, propping up crude prices. However, if these shipments remain smooth, the upward pressure on prices may begin to fade.

Refined product markets are significantly tight, particularly in Europe and the US. Gasoil inventories are seasonally below 2022 levels, and unless Persian Gulf or Russian diesel flows recover, market tightness is likely to worsen as winter approaches.