Refined Product Shortages Persist Despite Hormuz Crude Recovery

The Disconnect Between Crude Recovery and Pump Prices

Consumers across the United States and Europe face a sustained shortage of refined products like gasoline and diesel, despite crude oil volumes flowing out of the Strait of Hormuz returning to near prewar levels.

Persian Gulf Crude Flows Surge

The volume of crude oil exiting the Persian Gulf has doubled since the middle of September. According to data from the shipping firm Kpler, transit has risen from an average of approximately 6 million to 8 million barrels per day to nearly 13.5 million barrels per day. Saudi Arabia is currently exceeding its 2025 export projections, moving significant volumes through the Strait of Hormuz and via its alternative Red Sea port. Kpler estimates Saudi crude exports have reached at least 6.4 million barrels, compared to 5.4 million barrels before the war. While tanker-tracking services often report varying figures due to different methodologies and time frames, the trend confirms a consistent recovery in crude transit.

The Refined Product Bottleneck

Despite the rebound in crude, the supply of refined products remains at roughly half of prewar levels. Kpler estimates that 3 million barrels a day of refined products are currently missing from the Hormuz equation. This shortfall is compounded by ongoing strikes against Russian refineries and renewed export bans from China, which has shown little inclination to increase supplies to the global market. Because refined products are not reaching the market at the same rate as crude oil, the price of diesel in the United States and Europe remains at near-record highs, affecting sectors ranging from agriculture to trucking.

Economic Pressure on Iranian Exports

The recovery of energy flows has bolstered the Trump administration’s strategy of combining U.S. naval escorts with a distance blockade on Iranian vessels. U.S. Treasury Secretary Scott Bessent indicated that Iran may run out of runway in a matter of weeks as the last few tankerloads of oil it sent to China during the cease-fire are emptied. The Iranian economy faces mounting pressure from a rapidly depreciating currency and a limited ability to finance necessary imports.

Structural Volatility in Global Markets

The current disparity between crude recovery and refined product scarcity suggests that relief at the pump for consumers remains unlikely for several months. While the administration’s focus remains on compelling Iran to seek terms through economic pressure, the global energy market continues to struggle with the structural absence of refined fuel processing capacity. This volatility persists even as Saudi oil exports remain significantly higher than they were prior to the conflict.