Americas Oil Supply Routes

9 August 2026 — Saudi refinery hit again as the Hormuz workaround comes under fire

Two things moved today and they point in opposite directions. On Hormuz, Iranian Foreign Minister Abbas Araqchi said the Iran–Oman shipping-lane agreement is in its final stages — but also that it would not by itself reopen the Strait, saying reopening depends on further US actions including compensation for attacks on Iran. Separately the IRGC said the Strait reopens when Washington accepts Iran’s conditions, and Mohammad Baqer Zolqadr, secretary of Iran’s top national-security body, listed broader demands including lifting sanctions and the blockade and ending attacks on Iran and its regional allies. Three speakers, three different claims — reported separately rather than merged into one Iranian position.

Meanwhile the route around Hormuz was attacked. The Houthis said they struck Saudi Aramco’s 400,000 b/d Jazan refinery on the Red Sea coast with a drone, spokesman Yahya Saree calling the strike precise and framing it as a response to Saudi drone incursions over Saada and Hajjah. Saudi Arabia’s energy ministry confirmed a fire at the facility, said it was extinguished and reported no injuries — without stating a cause. The claim and the confirmation come from different parties; only the fire is officially established. The refinery had already been shut after the late-July attack.

Why the pairing matters more than either item alone. Jazan sits on the Red Sea side of Saudi Arabia’s workaround to Hormuz — the corridor that lets Aramco move refined product without transiting the strait. One chokepoint is negotiating a route back toward normal while the alternative corridor becomes less secure. That is what the market has to price, and Brent’s $83.55 close on Friday (+1.3%, Reuters) reflects a market still waiting for clarity rather than one that has resolved anything.

Status, stated plainly. Hormuz reopening: NOT AGREED. Iran–Oman shipping lanes: final stages, per Araqchi. Reopening conditions: unresolved. A lane design describes where ships would go if the strait reopened — not whether it will. Any headline reading “deal close” as “reopening imminent” is a misreading of what was actually said today.

8 August 2026 — Iran and Oman agree a route; eight vessels crossed

The negotiating pause below has produced something concrete. Iran says it has reached agreement with Oman on a proposed shipping route through Hormuz, with a joint statement in final drafting (Foreign Ministry spokesman Esmail Baghaei, 5 August, via Bloomberg). The reported framework routes inbound vessels near the Iranian side and outbound vessels down the Omani side, imposes no transit or service fees, and may include regional participation in demining; Deputy Foreign Minister Kazem Gharibabadi told IRNA it is a temporary route intended to run two to four months. Fortune reports (7 August) that the emerging deal recognises Iran’s control of the waterway. NPR called a partial reopening “close” on 6 August.

An agreed route is not a reopened strait. Kpler counted eight vessels crossing on 5 August — five tankers and three bulk carriers — against more than 100 a day before the conflict. That is the same order of magnitude as the single-digit weekends recorded on 27 July, so on the only metric that measures actual movement, nothing has yet changed. A return to normal tanker, LNG and container flows plausibly requires several consecutive weeks of incident-free transits, published routing protocols, credible mine clearance and a stable US–Iran political agreement — none of which is in place.

Futures have traded the negotiation rather than the flow: Brent hit a three-week low of $79.36 on 4 August, settled $79.45 on 5 August, then recovered to $83.55 on 7 August (+$1.06, +1.3%) as the terms of who would control the strait came back into doubt (Reuters). Friday’s settlement is the latest available; 8 August is a Saturday.

Provenance, so nothing is rolled forward silently. Two figures in the 2 August note below have not been refreshed and should not be read as current: the ~25 Bab el-Mandeb crossings, which was already a floor rather than a count because vessels run dark, and the Kirkuk–Ceyhan ~170–180,000 b/d flow against 750,000 b/d of reserved capacity. Both are dated 2 August and stand as of that date only. Note also that vessel counts and barrel-per-day flow estimates are different metrics measured by different methods — they are not interchangeable, and a recovery in one does not evidence a recovery in the other.

2 August 2026 — Negotiating pause at Hormuz; the water stays dangerous; Kirkuk–Ceyhan extended

President Trump says the planned strikes on Iranian energy targets are cancelled or postponed while Gulf governments try to complete a deal covering Iran’s nuclear programme and the “immediate, complete and total” reopening of Hormuz; Israel is said to have joined, Iran has not publicly accepted, and no verified reporting shows normal traffic resuming. The weekend produced two tanker incidents regardless: a vessel disabled by an unknown projectile off Limah (engine room hit, “not under command”), and a reported explosion close alongside a second tanker ~21nm north-west of Khasab — both unattributed. Hormuz is permitting, or failing to prevent, individual passages; Bab el-Mandeb improved to ~25 crossings but every count is a minimum with ships running dark; SUMED loadings have surged (Sidi Kerir 28.79M bbl for July, per Kpler via Reuters) even as a drone struck gas vessels at Damietta, and CPC has suspended loadings twice in a week. One durable positive: Turkey and Iraq extended the Kirkuk–Ceyhan pipeline deal by a year — reserved capacity up to 750,000 b/d against ~170–180,000 flowing, a Mediterranean outlet for Iraqi crude that needs no strait transit, secured on conditions. A pause in the shooting is not a reopening of the sea.

27 July 2026 — The shooting has paused; the shipping crisis has not

Financial markets are pricing a pause; the physical system is not. Brent fell more than 6% on Monday to about $90.58 a barrel (WTI ~$83.51) after the US and Iran refrained from striking each other for a second consecutive day, with Oman and other intermediaries working to restore the interim ceasefire framework and negotiate Hormuz shipping arrangements — roughly $11 of war premium out since Brent reached about $102 on 23 July. But traffic through both chokepoints stayed severely depressed. Hormuz ran in single digits over the weekend — about seven commodity vessels Friday, three Saturday (all dark) and seven Sunday (Kpler) — so the strait has not meaningfully reopened. Bab el-Mandeb fell to just 11 crossings on Sunday (seven of them oil tankers), the lowest in months, after the Houthi strikes on Jizan and Yanbu, though several large VLCCs carrying Saudi, Emirati and Russian crude still escaped south toward Asia. Physical crude cargoes reached two-month highs last week and roughly 10 mb/d of Middle Eastern barrels may still be displaced. The signal has changed; the supply system has barely changed — market de-escalation without physical normalisation, with the US naval blockade still operating and the nuclear dispute unresolved.

21 July 2026 — Ceasefire collapses again; Houthis declare an embargo on all ships to Saudi ports

The interim 17 June truce has broken down and US strikes have run a tenth consecutive night (CENTCOM), with Iran striking a Kuwaiti power and desalination plant. The Red Sea threat is now concrete: in an email to shipowners seen by Bloomberg, Yemen’s Houthis warned their reimposed blockade covers all ships calling at Saudi ports — not just Saudi-flagged vessels — directly threatening Yanbu, the Red Sea outlet Saudi Arabia uses to bypass Hormuz. Enforcement is unproven, and a Saudi-led coalition says it has begun protective measures at Bab el-Mandeb. Hormuz itself runs at a near-halt — about four commodity vessels crossed Monday (Kpler), every one dark. Brent touched $91.42 Monday, its highest since 11 June, before easing to about $89 on hopes of a fresh ceasefire, while European low-sulphur gasoil hit a record premium near $60/bbl over Brent. The dated detail below remains the fuller background.

13–14 July 2026 — Both powers claim Hormuz: Iran declares it closed; the US drops its 20% toll but tightens a full Iran blockade

The US–Iran conflict has escalated sharply since the July ceasefire collapsed. Over the weekend Iran’s IRGC declared the Strait of Hormuz closed “until further notice” — after its forces struck the Cyprus-flagged container ship GFS Galaxy (engine-room fire, crew evacuated to a lifeboat, one crew member missing; CENTCOM). The US answered with further rounds of strikes, the latest on Sunday using one-way attack sea drones for the first time, and Iran retaliated across Kuwait, Jordan, Qatar, Bahrain and Oman — including the first strike on Gulf oil infrastructure in weeks, a Kuwaiti drilling facility. Oil jumped at Monday’s open, Brent trading above $79 and WTI near $74; by Tuesday Brent had pushed above $85, a four-week high, as the war premium returned in force.

On Monday the US hardened its claim over the strait: in a Truth Social post President Trump declared Hormuz “OPEN… with or without Iran,” reinstated a US blockade of Iranian ships and customers, styled the United States the “Guardian of the Hormuz Strait,” and proposed a 20% fee on all cargo transiting the waterway, the process to “begin immediately.” Iran’s Persian Gulf Strait Authority countered that passage was “currently unfeasible” and suspended transit permits. Both powers now assert a right to control — and charge for — the chokepoint, days after the IMO Council ruled that transit through international straits may not be tolled. On Tuesday, after backlash from shippers and the IMO ruling, Trump abandoned the 20% fee — replacing it with a push for Gulf trade and investment deals — while keeping a full blockade on Iran-linked shipping (vessels to or from Iranian ports, or carrying Iranian cargo), which CENTCOM began enforcing that afternoon.

Iranian officials say a US projectile hit the perimeter area of the Bushehr nuclear power plant, and Reuters has carried the perimeter claim — but there is no independent confirmation that the reactor itself was hit. Earlier IAEA and Reuters reporting on previous Bushehr incidents found no reactor damage or radiological release; no fresh IAEA confirmation has yet been seen for this latest strike.

Reuters ship-tracking found at least four oil and gas tankers reversed course near the strait; others continued to transit. The strait’s status is now openly contested — Iran declares it closed while the US and CENTCOM insist it stays open to lawful transit, and the JMIC says the Oman-coordinated southern lane remains available. The US Navy-led Joint Maritime Information Center has raised the transit threat to “severe” — up from “substantial,” its highest since mid-June — and the IMO Secretary-General has urged shipowners not to expose crews to unnecessary danger by transiting while safety cannot be assured. Brent spiked about 6% to near $80 as the fighting resumed, round-tripped to about $76 by Friday, then jumped back above $79 at Monday’s open and above $85 by Tuesday.

A fresh JMIC advisory (013-26, 10 July) keeps the threat level at “severe” but stresses the strait stays open: the southern transit route has been expanded and remains available to all traffic, coordination with NAVCENT’s NCAGS is offered but not mandatory, and — pointedly — “there is no controlling authority regulating passage or fee required for any route.” US NAVCENT added that “no nation has the authority to close or control the Strait of Hormuz,” with US forces prepared to defend freedom of navigation. Mariners are warned of a mine-danger area in the traditional traffic-separation scheme and to expect VHF hailing from naval forces.

War-risk insurance underlines the caution. Marsh, the world’s largest marine broker, says premiums to transit Hormuz now run 2–6% of a vessel’s value — up from a fraction of a percent before the war, having peaked near 10% at the height of the fighting (large no-claim discounts often trim the headline rate). Brokers report fewer requests for quotes since the ceasefire frayed this week, though cover remains available (Bloomberg, 9 Jul). The Lloyd’s Joint War Committee has listed the whole Gulf as high-risk since March — a listing that adds cost and a notification duty but does not bar transit.

On a second front, Ukraine’s drone campaign in the Sea of Azov has escalated sharply. Its Unmanned Systems Forces say they have struck Russian shadow-fleet shipping — the tankers that move sanctioned oil and products — across a nine-day operation, with Kyiv now putting the total at 116 vessels(an unverified claim; ~76, including 21 tankers, was the earlier multi-sourced count). In response Russia suspended shipping through the Kerch Strait and the Don–Azov Canal (FSB Border Service, from 10 July) and says it may divert to Black Sea and Baltic ports — a self-imposed chokepoint closure that cut Azov AIS traffic roughly55% (Starboard Maritime). With up to a quarter of Russian wheat exports transiting the Azov, Euronext wheat jumped about 4% to a six-week high. The IMO Secretary-General condemned the Azov and Black Sea attacks, warning the focus on Hormuz should not overshadow threats elsewhere; Russia’s Lavrov called them “terrorism,” while Kyiv says it strikes only military or war-supporting assets. Neither side’s figures are independently verified (Reuters, TWZ, gCaptain).

Sources: Reuters, WSJ, Bloomberg, JMIC 013-26, NAVCENT/NCAGS, Lloyd’s JWC, IMO, CENTCOM, UKMTO. Available footage and Tier-1 reporting attribute the “cancer” remark to Iran’s government and leadership — not the Iranian people, and not a call for their eradication.