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Bob McNally reports that the reinstated U.S. blockade on Iranian oil exports has effectively removed Iran from the global market.

Bob McNally, president of Rapidan Energy Group, stated that the reinstated U.S. blockade in the Gulf of Oman has effectively removed Iran from the global oil market balances. The blockade, which was lifted briefly during negotiations in June and July, was reinstated after the collapse of the 'deal to make a deal' and a return to Middle East hostilities. This move has significantly impacted Iranian oil exports, particularly from the key Kharg Island terminal, which handles over 90% of all shipments. Consequently, Iranian crude oil offers for September and October delivery have dropped sharply compared to previous months. While China has reduced its reliance on Iranian crude, Chinese refiners are now seeking alternative suppliers in Iraq and Brazil. McNally noted that while crude oil futures may be underpricing geopolitical risk, the refined product market is already showing signs of severe tightness, with diesel crack spreads hitting record highs in both the United States and Europe.

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