Syz the moment

China buys roughly 90% of Iran’s oil exports, largely through independent refiners. Purchases are slowing — from around 823,000 barrels/day in July to 534,000 in August — but they haven’t stopped. Now the stakes are rising. Treasury Secretary Scott Bessent has warned that entities doing business with Iran could be cut off from the US dollar system. Beijing’s response? Sanctions are not the solution, and China will defend its economic interests. The potential escalation is significant: If China keeps buying Iranian crude, Washington could move against Chinese financial institutions facilitating those trades. At that point, this would no longer be just about Iran. It could become a direct financial confrontation between the US and China — with the dollar system at the center of it. Source: Bull Theory

The key signal is not just fewer barrels moving through the region. It is where those barrels are now showing up. Ports like Fujairah and Sohar, both located outside the Strait, are seeing a surge in crude departures. That suggests they are increasingly acting as bypass routes, transshipment points, and ship-to-ship transfer hubs for oil that would normally have taken a more direct path through Hormuz. Importantly, this does not mean the UAE or Oman suddenly produced far more oil. It may also hint at rising “dark” vessel activity. When AIS signals are limited or interrupted, voyage tracking becomes harder, and cargoes can effectively “reappear” outside Hormuz. So the disruption is no longer visible only in oil prices and tanker rates. It is now visible in the geography — and the opacity — of the physical oil market itself. Source: Michael McDonough DST

The U.S. Strategic Petroleum Reserve (SPR) fell by another 6.1 million barrels last week, dropping to 298.7 million barrels. That pushes the reserve below 300 million barrels for the first time since January 1983, and to its lowest level in more than 43 years. The pace of depletion is also accelerating: • Previous week: -2.8 million barrels • Latest week: -6.1 million barrels Since the Iran war began, Washington has relied heavily on the SPR to offset disruptions to global oil supplies and limit upward pressure on crude prices. But that strategy has a limit. The reserve is now entering the estimated 250–300 million barrel operational floor, where extracting additional oil can become increasingly difficult. At the current pace of withdrawals, the U.S. could move deeper into that critical range within weeks. The SPR was built as America’s emergency energy insurance policy. That insurance policy is getting dangerously thin. Source: Global Markets Investor, zerohedge

Since the Iran war began in February, Washington has repeatedly released emergency oil whenever oil prices surged to stop fuel costs from exploding. Source: Bull Theory

Chevron, $CVX, had its best quarter ever. Exxon, $XOM, its best since 2022. Shell, $SHEL, second-highest on record. Source: Hedgeye @Hedgeye Bloomberg

Proved reserves show where long-term oil power still sits Saudi Aramco remains in a league of its own with around 260 billion boe Source: Jack Prandelli on X

President Trump said the “perimeters of a deal” had been reached with Iran to reopen the Strait of Hormuz after speaking with Saudi Crown Prince Mohammed bin Salman (MbS). According to Saudi Arabia’s state news agency, both leaders emphasized dialogue, de-escalation, and pursuing a truce to prevent a wider regional conflict. Axios reported that MbS urged Trump to avoid large-scale strikes on Iran, warning of possible retaliation against Israeli and Gulf energy infrastructure. Saudi officials also sought clarity on U.S. military plans. As a key U.S. ally, Saudi Arabia has historically shaped Washington’s Iran policy and appears to have influenced efforts to delay or limit further escalation. Source: zerohedge

That is more than Russia and Saudi Arabia , at 10.16 million and 9.73 million. It is nearly triple Iran's 4.45 million. America is not just the largest oil producer on earth, it is exporting record volumes of that supply overseas. Source: Jack Prandelli on X