Six ships. That was the entire commodity traffic through the Strait of Hormuz on Monday 10 August, according to shipping data from Kpler cited by Reuters. Before the war, roughly 140 vessels a day moved through that channel. Four tankers went in, two came out, and two of the inbound ships were empty product tankers heading in to load. For a chokepoint that normally carries about a fifth of the world’s oil consumption, six is not a disruption. It is closer to a shutdown with a few exceptions.
The number that matters more is what BofA’s Francisco Blanch said needs to happen before markets even start to calm down: traffic has to recover to 80 to 100 ships a day just to stabilise prices, not to normalise them. Blanch told CNBC that only 5 to 10 ships a day are currently passing through. Even a generous reading of “resolution” leaves the strait operating at roughly a tenth of its pre-war throughput for months to come.
The diesel number that should not exist
The clearest sign that this is a structural shock, not a headline spike, is in the diesel market. Blanch described crack spreads (the difference between the finished fuel price and the crude it is refined from) of $80 to $85 a barrel. Put plainly: the margin on turning crude into diesel is now higher than the price of a barrel of WTI crude itself. “That’s kind of never happened before except for a few occasions,” he told CNBC, as reported by OilPrice.com.
That inversion matters because crack spreads are usually a proxy for refining capacity, not crude scarcity. Blanch was explicit about the distinction: “We have enough crude oil for now, but we have true shortages in diesel markets, gasoline markets and also global gas.” The bottleneck has moved downstream: from getting oil out of the ground to turning it into the fuels that trucks, ships, and generators actually burn. Gasoline differentials are in similarly rare territory, and refining margins across the board are at record levels.
Inventories were the shock absorber. They are gone
Most major oil-market disruptions of the last two decades had one thing going for them: strategic and commercial inventories that could be drawn down while the market sorted itself out. Blanch’s warning cuts straight through that comfort. “We don’t have the inventories that we used to have,” he said. Commercial reserves and strategic stockpiles in China and the US have already been tapped, which means the usual buffer between a supply shock and a price shock has largely disappeared.
This is why the price action on 11 August looks the way it does. Brent climbed past $87 and WTI past $82 as talks between the US and Iran stalled again, a roughly 3% move in a single session. Iran has listed six conditions for reopening the strait, while President Trump has demanded reparations “for the damage they’ve done over a 50-year period.” Neither side is negotiating from a position that suggests urgency, and ING’s commodity strategists put it well: “risks remain skewed to the upside for oil prices.” Markets are not pricing a quick fix. They are pricing a long grind.
The stress is already baked into the system
UBS runs a Global Supply Chain Stress Index built from 23 separate indicators, and its senior international economist Pierre Lafourcade published an update that should worry anyone planning freight or fuel budgets past September. The median reading eased slightly in July from June’s peak, the highest since the pandemic, but it is still 0.9 standard deviations above where it sat before the Iran conflict started (OilPrice.com / UBS).
Lafourcade’s note makes an important point about where the stress is concentrated. Seaborne oil and gas flows are the component most directly tied to the Hormuz shock; everything else in the index reflects it indirectly. Air-freight costs actually improved in July, which sounds like good news until you notice that ocean shipping costs “ratcheted up again across all major reporters,” in Lafourcade’s words, referring to the Baltic, Harper Petersen, Drewry, and Freightos indices. Cargo is finding workarounds. Fuel is not.
That distinction between direct and indirect stress is the part that gets lost in the daily headline about Brent’s price. The strait closure does not just remove barrels from the market. It reroutes tankers around Saudi Arabia and the UAE, extends transit times, forces some ships to turn off transponders to pass through unnoticed (Iraq is still reporting average exports of 2 million barrels a day despite this, per Reuters, cited in the same OilPrice.com piece), and pushes refining margins to levels that make finished fuel expensive even where crude itself is available.
Why “a deal tomorrow” does not fix this by Friday
The natural question is what happens if Iran and Oman finalise the joint management arrangement they have reportedly been discussing, or if the US and Iran suddenly find common ground. The honest answer, based on the evidence so far, is: not much, not quickly.
Lafourcade’s own note anticipates this. Markets have already priced in some optimism about a resolution, reflected in roughly a $20 a barrel drop in Brent from its July 23 peak, but he expects “stress in supply chains is likely to linger on far beyond any implemented accord.” That lag has a mechanical explanation. Refining capacity does not expand overnight. Depleted inventories take months to rebuild, and nobody rebuilds them by paying spot prices at record crack spreads if they can help it. Rerouted shipping patterns, once established, tend to persist because the logistics contracts and insurance arrangements built around them do not unwind on the day a ceasefire is announced.
What to actually watch
If you are trying to plan around this rather than just read about it, the two numbers that matter most are the daily vessel count through Hormuz and the diesel crack spread, because together they tell you whether this is a crude story or a refined-products story. Right now it is clearly the latter. Watch for whether Iran and Oman’s joint management arrangement actually produces a sustained increase in transits, not just a headline announcement. And watch inventory data out of China and the US. Blanch’s warning about “keep creeping higher into the winter” is really a warning about heating season demand meeting a market with none of its usual slack.
The strait will probably reopen at some point. Six ships a day is not a permanent state of the world. But the assumption that reopening means a quick return to $70 to $80 Brent, the range BofA had assumed before this escalation, looks increasingly like the wrong baseline. The diesel market got there first, and it is not waiting for the news to catch up.