A Strait-Up Fuel Shock

5 June 2026: How the Iran War rewired the refined product trade. After the U.S. – Iran war caused a near complete closure of the Strait of Hormuz, it wasn’t only crude that affected the oil markets. Refined products were significantly impacted as well. Some 5.0 Million barrels per day (Mb/d) of product exports out of the Persian Gulf were cut and about 3.0 Mb/d of refining capacity was forced offline. Countries around the world responded by cutting refining runs and limiting exports of products. Except the United States. Refiners in the U.S. increased their runs and boosted their exports to take advantage of booming refining margins and record product prices. However, exports increased faster than domestic runs, leading to a rundown of product inventories as well. As the conflict with Iran drags on, the question is how long the U.S. can act as the “shock absorber” for the lost Middle East product supply and how it will impact the tanker market. We’ll discuss that in more detail in this week’s Tanker Opinion.