Six million barrels per day of oil are still not passing through the Strait of Hormuz, according to senior economist Tracy Shuchart. The shortfall is keeping oil markets tight and limiting the return of lost Gulf Cooperation Council (GCC) production.
Crack spreads and refining stress
Shuchart notes that widening crack spreads are signaling stress in the global refining sector. He points to reduced output from Russian refineries and a broader shortage of refining capacity that could intensify during the upcoming winter months.
Winter outlook and maintenance
Fall refinery maintenance schedules are expected to further constrain supply, creating a “dire winter setup” for fuel markets.
Policy considerations
The economist argues that a U.S. diesel export ban would likely backfire, reducing market liquidity and exacerbating price pressures.
Hard assets performance
Shuchart compares gold and Bitcoin, observing that both hard assets are maintaining value amid the broader market tightening.
Venezuela’s role
He highlights Venezuela’s oil discount and its implications for U.S. refiners, as well as the country’s significance in geopolitical and critical‑minerals contexts.
Broader commodity pressures
Additional topics include stress in the bond market linked to AI data‑center debt, an anticipated copper shortage tied to AI demand, and questions about the United States’ ability to navigate a potential supply shock.
