TL;DR: BofA warns that without a Hormuz reopening agreement, oil prices will keep climbing into winter, with diesel, gasoline and gas shortages pushing refining margins to record highs.
The Details
Bank of America’s commodities head Francisco Blanch says current traffic through the Strait of Hormuz is only 5‑10 ships per day versus ~140 pre‑war, and markets need 80‑100 ships daily to stabilize. The shortfall is already inflating diesel crack spreads to $80‑$85 per barrel—higher than WTI crude—and pushing gasoline differentials to historic levels. Inventories are thin, so any further delay could force oil prices into the $70‑$80 Brent range and beyond, tightening downstream markets and rewarding upstream producers.
Watch For
- Progress in U.S.–Iran negotiations on Hormuz reopening (any agreement could quickly normalize traffic).
- Daily ship counts through Hormuz and alternative routing volumes via Saudi Arabia/UAE.
- Refining margin trends (diesel crack, gasoline spreads) and inventory builds/losses in key hubs (Cushing, Rotterdam).
Analyzed by FNXT Experts