White House is preparing plan for 90-day diesel exports ban If Politico is right, Europe is heading into a financial crisis.
The Trump administration is preparing a 90-day ban on US diesel exports to bring down energy prices ahead of the midterms, despite opposition from the oil industry and splits within the administration. Diesel prices have hit record highs, driven by the war against Iran launched in February and Ukrainian strikes on Russian refineries, with the average price topping $6.50 a gallon. Some GOP lawmakers and officials worry the move could backfire by raising gasoline and jet fuel prices, but Trump appears set to announce the ban by the end of the week.
"Oil does not need peace to fall"
Brent continues to carry a substantial geopolitical premium, but the physical shortage is already shrinking. Goldman estimates that the global oil deficit has narrowed from roughly 7mb/d near the start of the war in March to approximately 1mb/d in Q3. Gulf production has partially recovered, demand has weakened and supply outside the region has risen faster than expected. Oil does not need the conflict to end. It needs the disruption to stop getting worse. Source: GS / TME
What absorbed the Hormuz oil shock?
~35% of the gap: pipelines + new supply ~20%: inventory drawdowns ~45%: lower oil consumption The shock absorbers worked. But some are temporary, and the cushion is wearing thin. Source: McKinsey
Diesel trading as if Brent was $180
Source: zerohedge
Diesel is trading at over $200/barrel...
People say oil is the lifeblood of the economy... But the backbone of our economy runs on diesel: - ~80% of US freight by weight - ~80% of global trade moves by sea - Most farming - Most mining Source: Lukas Ekwueme
China is now setting the price of oil.
Shanghai crude futures surged to a record 929.4 yuan per barrel, their highest level since the contract launched in 2018. The catalyst? A major Middle East pipeline shutdown has tightened supplies, forcing Chinese refiners to compete aggressively for replacement cargoes. Oman and Murban crude are now both trading above $126 per barrel. But the most important signal is not simply the price surge. It is where the move started. Shanghai is leading, not following, Brent and WTI. When China’s domestic benchmark moves first, its refiners become the marginal buyers setting the price for the next available barrel. The message is clear: global oil-price discovery may be shifting east. Source: Jack Prandelli on X, Bloomberg
Dear Donald, the "no war no peace" with Iran doesn't work here. You need to try something new...
Brent is closing in on $110 after Houthi strikes shut the Saudi East-West pipeline, with Riyadh’s output at a 30-year low of roughly 6m b/d and Hormuz and Bab el-Mandeb presenting a two-front chokepoint risk. This is a supply shock, which means it doesn't fade on its own, and the WTI/10Y correlation has hit 0.96. Every barrel higher is a basis point in the long end. Then there's the quiet second claim on the same buyer pool: the AI build out. Hyperscaler capex now runs >100% of operating cash flow, implying ~$1.3tn of debt by 2028, with tech leading the $380bn 2026 bond supply, competing directly with Treasuries while bidding up chips, power and labor. The trade funding the equity bull is now financing the tightening cycle. Source: TME
Oman Crude pushes further above $150!
$155.14 This is the only Middle Eastern crude that does not have to pass through either the Strait of Hormuz or Bab el-Mandeb. That means oil prices in the rest of the world will eventually have to catch up with Oman. Source: Karel Mercx
