U.S. Says Oil Is Pouring Through Hormuz. Trackers Can’t Find It. Industry firms that count ships, oil output and imports aren’t able to verify the full volume of oil the U.S. claims is getting through Iran’s chokehold
Energy Secretary Chris Wright said last week the U.S. military had helped ship over 15 million barrels of crude and oil products out of the waterway last Tuesday. He put the average oil exports through the strait over a seven-day period at more than 8 million barrels a day. Earlier this month, Wright said the seven-day average stood at around 9 million barrels a day.
The count from commercial ship trackers tells a different story, with estimates ranging from roughly 2 million to 6 million barrels a day. Industry figures on the amount of crude oil and oil products being loaded onto ships in the Persian Gulf and delivered to buyers don’t corroborate the U.S. claims.
There are lots of reasons the numbers can diverge. Many ships are crossing the strait at night with their transponders off, making them hard to track by radio signal or satellite imagery. Big tankers can carry 2 million barrels apiece, so missing one or two can make all the difference. Measurement periods also make a big difference, as do assumptions about how full ships are when they cross.
Wright has said private data firms are undercounting ships that move covertly through the waterway. Still, a persistent gap remains between Washington’s estimates and what the market can independently verify.
“What’s remarkable is how similar tanker trackers’ numbers are. You’d expect someone to have figured out a way to validate the White House numbers if there was a way,” said Rory Johnston, founder of Commodity Context, an oil-market research firm. “As of yet, I haven’t seen anyone do it.” (…)
“Commercial traffic through the Strait of Hormuz remained at reduced levels,” UKMTO said in its report. “Independent tracking data indicated suppression with single-digit numbers transiting in both directions.” (…)
So far, markets are relatively relaxed, with benchmark Brent crude futures elevated around $90 a barrel but well off their wartime highs, indicating the market isn’t desperate for supplies.
Earlier in the war, a yawning gap emerged with physical market cargoes priced well above Brent futures, signaling immediate supply pressure and traders’ optimism that the war would be over soon. That gap—once as large as $36 a barrel—has narrowed to less than $6 in recent months, according to Argus Media, a price-reporting agency. (…)
The United Arab Emirates and Saudi Arabia have also managed to route millions of barrels a day around the blockade by piping them across the desert to the Gulf of Oman or the Red Sea. Mohsen Rezaei, a top Iranian official, said late Sunday that those routes will be threatened if the U.S. continues its campaign of squeezing Iran’s economy.
Kuwaiti, Iraqi and Emirati officials said some tankers are getting through under separate arrangements with Iran, meaning not all of the traffic is moving under U.S. protection. Ship trackers say roughly a third of the vessels that have transited the strait during August have used the Iranian-administered route along the northern reaches of the waterway. (…)
Kpler, a ship-tracking firm, estimates that exports of crude and oil products through Hormuz have run at about 2.3 million barrels a day so far in August, down from 4.9 million barrels a day in July. Huax, another tracker, puts a current range for crude and refined products at 2 million to 5 million barrels a day.
Johnston’s latest seven-day average of confirmed transits is about 4 million barrels a day, though he expects that to be raised to 5 million to 6 million as ships that made dark crossings turn their transponders back on after they clear the strait and their voyages can be reconstructed.
Data from Vortexa, another tanker tracker, runs closer to the administration’s numbers but only across a short window. It says its seven-day average recently peaked at 9.2 million barrels a day. But its 28-day moving average, which the company says is more representative because it smooths out short-term spikes and volatility, remains at around 6 million barrels a day, underscoring how dramatically the picture can change depending on the dates selected. (…)
There is another way to check: Oil can’t move through the strait if it isn’t first put on tankers somewhere in the Persian Gulf. Those figures also don’t line up with the U.S. transit claims.
LSEG puts crude and product loadings inside the Persian Gulf at about 4.4 million barrels a day in July and 1.9 million so far in August.
The data provider says Iraq, which lacks a major bypass route, loaded just 1.1 million barrels a day so far this month, less than a third of prewar levels, while Kuwait loaded 0.5 million, one-fifth of its prewar rate. Kuwaiti officials say they are exporting more, around 1 million barrels a day.
The ultimate check on Washington’s numbers is whether the barrels ultimately surface somewhere. Even if tankers disappear while crossing Hormuz, much of that oil should eventually show up in data on barrels unloaded to buyers or middlemen.
So far, the U.S. government’s claimed volumes aren’t fully showing up in other countries’ import volumes. According to LSEG data, an average of 11.6 million barrels per day of Middle Eastern crude and refined products have been or are scheduled to be discharged in Asia.
That number includes oil exports routed around Hormuz by pipeline, not just barrels escorted through the chokepoint.
SPR barrels are down 16% since June 5 (5.6M bbls/day), 7.3% in the last 4 weeks (4.0M bbls/d).
U.S. crude oil exports recently rebounded to over 4 million barrels per day in August 2026 after hitting an eight-month low in July. In effect, the SPR releases are exported, helping keep prices (artificially) low.
The US Energy Information Administration on Aug. 11:
We expect U.S. commercial crude oil inventories to remain below the five-year (2021–2025) low through the end of 2026. Increased crude oil exports, reduced imports, and high refinery runs since mid-April have led to consistent weekly declines in crude oil stocks. Net imports are forecast to remain below average through 2027 due to strong international demand for U.S. crude oil exports.
China Defends Cooperation With Iran, Warns Against Disrupting It
Beijing threatened to retaliate against the US and signaled it won’t back away from its cooperation with Iran after the Trump administration’s latest sanctions targeted businesses in China and Hong Kong.
Speaking on Tuesday at a regular press briefing in Beijing, Foreign Ministry spokesman Lin Jian gave China’s first official reaction to measures announced by Washington, saying it opposes unilateral sanctions and warning they risk worsening conflicts. The most urgent task is to de-escalate tensions and return to negotiations, he said.
When asked about Beijing’s response to the steps taken by the US against Iran and threats made against its trading partners, Lin reiterated that China would act to protect itself.
“China’s cooperation with Iran has always been conducted within the international framework and should not be interfered with or undermined,” he said. “China is closely monitoring relevant developments and will take all necessary measures to firmly safeguard its own interests.” (…)
Despite the inclusion of Hong Kong-based entities, the US avoided targeting major Chinese financial institutions. The measures suggest Washington is seeking to raise the costs of doing business with Tehran without yet confronting the broader economic and diplomatic fallout that could come from sanctioning large Chinese banks.
China buys the bulk of Iran’s oil and was its second-largest trading partner in 2025, behind the United Arab Emirates, which has said it cut all economic ties with Tehran after accusing it of firing ballistic missiles at its territory.
Also in Bloomberg:
Trump has previously said the US would impose secondary sanctions on any nation or company buying Iranian oil — and never followed through.
A campaign that excludes China isn’t likely to have a substantial impact on Iran, but focusing on Chinese firms could prompt retaliation — and potentially more pain for the global economy.
That’s partly because blacklisting Chinese companies risks opening a new economic confrontation with Beijing. Doing so now would fracture US-China ties just weeks before Trump and Chinese President Xi Jinping are set to meet in September. Asked directly about hitting China with new economic measures on Monday, Bessent said “no one is above the reach of US sanctions” but that he preferred “quiet diplomacy,” adding “we’re not going to name names.” (…)
In May, China ordered domestic companies not to comply with US sanctions on five refiners, while its biggest banks were caught between Beijing’s directive and the risk of losing access to the US financial system.
If the US were to hit China meaningfully — say, by targeting a Chinese bank — Beijing would view it “not only as destabilizing and as insulting, but also as a breach of” the trade truce previously agreed by Trump and Xi, said Michael Sobolik, a senior fellow at Hudson Institute. That could spur China to retaliate in ways that could hit the US hard, including with further export restrictions on critical minerals crucial to global manufacturing or limiting crucial pharmaceutical exports to the US, he said. (…)
Bessent acknowledged the risks of moving too aggressively, suggesting the administration would first give countries and companies a chance to cut their ties with Iran before imposing penalties that could reverberate through global markets.
“We are giving everyone the opportunity to remedy bad behavior,” he said. “Why would I want to blow up the global financial system?” (…)
Secondary sanctions on countries doing business with Tehran would greatly expand the conflict with economic damage not just to China but also India, Turkey and nations across the Gulf, according to Vali Nasr, a professor at the Johns Hopkins School of Advanced International Studies and a former adviser to the US State Department.
“The US is essentially expanding its war in the Gulf to a much greater war between itself and other global actors around the world,” Nasr said.
Bah! A war here, a war there… Why not also rename the Department of the Treasury the War Treasury?
On Monday, the US Treasury Department unveiled a package targeting dozens of individuals and entities as part of what Treasury Secretary Scott Bessent described as Operation Economic Outcast, a broader campaign aimed at severing Iran’s remaining financial lifelines. (…)
“Sanctions against specific entities are meaningless as entity-specific sanctions can’t be applied quickly enough to match the speed at which substitute entities can be created,” said Derek Scissors, a senior fellow at the American Enterprise Institute who tracks Chinese overseas investment.
Some firms could start out as shell companies and then handle more activity if they survive, Scissors said, adding that the dozens of entities the US named “exist in a universe of tens of thousands.” (…)
The other Bessent war:
(…) Druckenmiller argued in a Wall Street Journal opinion column that policymakers should let the bond market do its job, recalling the lessons he learned during his time as a hedge fund manager. (…)
It was an unusually public pushback from Druckenmiller, who worked alongside Bessent and George Soros and remains one of the most influential voices on Wall Street. (…)
Druck’s experience and wisdom::
Consider what the machine was pricing. Inflation is 3% to 4% and has been above the Fed’s target since 2021. Unemployment is 4.1%, full employment by any definition. The deficit is running near 6% of gross domestic product, a number America has never before produced in peacetime at full employment. The national debt crossed $40 trillion the same week Treasury intervened. Net interest will exceed $1.1 trillion this fiscal year, more than the defense budget. The 10-year yield, even after the summer selloff, sits at or below the economy’s nominal growth rate. That means a borrower (federal government) running 6% deficits at full employment, with above-target inflation, still funds itself at roughly the rate its economy grows.
Historically, that configuration is accommodative, not restrictive, of financial conditions. The bond market wasn’t being a vigilante, as some would argue. It was being a pushover that had finally begun to clear its throat, and Treasury moved to quiet even that. (…)
Democracies don’t repair their finances because a budget office publishes a table. They repair them only when the cost of inaction becomes visible and immediate, when mortgage rates bite, when auctions tail, when the political price of a rising long bond finally exceeds the political price of touching spending.
Every basis point of artificial yield suppression is a subsidy to procrastination. Suppressed long rates sugarcoat the interest-cost projections, shrink the apparent urgency, and let incumbents assure voters the debt is someone else’s problem. If Congress and the administration are unlikely to touch entitlements even with the market’s signal, they are certain not to touch them without one. Whatever this operation saves in basis points, it will cost multiples in delay.
Yield management always begins as a technical operation and ends as a policy commitment. (…)
Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests.
There is a quieter cost, too. Buying back long bonds while funding the purchases with bills shifts duration, or long-term interest-rate risk, out of public hands—economically, a small dose of quantitative easing run out of the Treasury rather than the Fed, easing financial conditions while inflation sits above target. These enlarged operations happen to run through the final stretch of a midterm campaign. Debt management that even appears to follow the political calendar spends the one asset that took two centuries to accumulate: the credibility of the Treasury market. That asset doesn’t regain its value so easily. (…)
In 2023, (…) I called Secretary Janet Yellen’s failure to term out the debt at generational-low rates the biggest blunder in Treasury history. Every household and corporation in America locked in low rates, and the one borrower that needed to most, didn’t.
At prevailing rates, interest expense reaches 4.5% of GDP by 2033 and 144% of all discretionary spending by 2043. We are tracking those markers early. Anyone who tells you entitlements won’t be cut is lying—not about the outcome but about who decides it. Either we restructure the promises deliberately, on our terms, protecting those who most need them, or the bond market restructures them for us, all at once, on its terms. (…)
You can’t buy your way out of a solvency conversation with liquidity tools. You can only postpone the conversation and raise the eventual price. (…)
If the 30-year must trade at 5.5% to clear, that isn’t a crisis. It is an invoice. Then do the only thing that durably lowers long-term yields: address the primary deficit. Reform entitlements gradually and honestly, through means testing, indexing changes, eligibility adjustments phased in over decades—so that the burden is shared across generations instead of dumped on the youngest.
The reward is enormous: A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.
Governments defending prices against fundamentals always lose. The only variable is how much they spend before conceding. The U.S. shouldn’t put itself on the wrong side of that trade, not with the most important price in the world, and not when that price is trying to say the one thing Washington most needs to hear: Let the bond market speak.
Trump Threatens 50% Tariff on Vehicles and Parts From Canada The move, which would take effect in January, is the latest in the rapidly escalating trade war between the two neighbors
(…) “On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump said Monday on Truth Social. U.S. tariffs on Canadian automobiles now stand at 25%, with discounts for the U.S. content in cars, while steel tariffs are at 50%. (…)
The new levies also cast further doubt over the future of the U.S.-Mexico-Canada Agreement, the trilateral deal that replaced the North American Free Trade Agreement. (…)
If the tariffs are implemented, a 50% levy could drive automakers to close factories in Canada, particularly if the U.S. eliminates tariff-rebate programs based on automakers’ use of U.S.-made parts. Auto parts regularly cross the U.S., Mexico and Canada borders multiple times before being put in a vehicle. Commerce Secretary Howard Lutnick, whose agency administers the tariffs, has said he wants to bring many of those supply chains to the U.S. (…)
Among the 11th-hour U.S. demands that Carney said derailed negotiations concerned the treatment of medium- and heavy-duty vehicles. He said that U.S. officials sought to deny tariff relief to those vehicles, calling it “a big change, obviously” that would make the Canadian auto industry uneconomic over time. Ford is retooling an automotive assembly plant in a Toronto suburb so that it can manufacture its F-Series Super Duty trucks. (…)
The same day, or the same week:
Trump Laments Lack of US Aluminum Amid Trade Row With Canada
President Donald Trump, who has argued that the US does not need Canada, lamented Monday that his northern neighbor did have something he wants: aluminum.
“This country desperately needs aluminum,” Trump said during a telephone rally for Mike Mazzei, a Republican candidate for governor in Oklahoma. “Selfishly, we need aluminum in this country. We don’t have it. We get it all from Canada for the most part, and we need it badly.”
In a social media post later Monday, Trump also pitched a “desperately needed” aluminum plant in Inola, Oklahoma while endorsing Mazzei. “You can’t get Aluminum in the United States, and this Plant will go elsewhere if it’s not approved,” he wrote on Truth Social. (…)
More than half of the aluminum that Americans consume each year is produced in Canada, making the country essential for multiple products including automobiles and washing machines manufactured in Michigan — a key political battleground state.
The US and Canada were on the verge of a deal last week that would have halved the aluminum levy. But the Trump administration faced pushback from the US steel and aluminum sectors, which urged it to avoid ceding too much to the Canadian market. (…)
What happened last week?
But as Greer haggled with the Canadians this week, a split emerged over the U.S. trade representative’s willingness to reduce an existing 50 percent tariff on aluminum derivatives to 25 percent in return for Canadian concessions.
At a White House meeting, White House trade adviser Peter Navarro and Commerce Secretary Howard Lutnick, whose department administers the national security tariffs, clashed with Greer, representing industry views that the higher aluminum tariffs were needed to encourage domestic manufacturing.
“Navarro and Lutnick were both yelling at Greer saying: ‘What are you doing? This is stupid. You know, we’re not giving these things away,’” said one industry representative, who spoke on the condition of anonymity to describe the confidential talks. (WSJ)
FYI: Trump:
- August 24: “They feel entitled, and yet, we don’t need Canada, they need us!”
- August 23: “We don’t need anything they have.”
- June 10: “We don’t need anything that Canada has.”
Must be true!
BTW:
Mr. Trump’s complaint about the U.S. trade deficit with Canada is particularly ironic since the latter owes entirely to imports of heavy crude oil that is especially well-suited for U.S. refineries. Exclude Canadian oil, and the U.S. would have a trade surplus. But U.S. refineries would also operate at lower capacity. (WSJ)
US grain farmers face worst crisis in decades as Iran war sends costs spiralling Middle East conflict adds to strains in America’s heartland months ahead of midterm elections
Farmers in America’s Corn Belt say they are facing their worst crisis in 40 years, as an explosion in diesel and fertiliser costs triggered by Donald Trump’s Iran war pushes grain producers to the brink. (…)
The huge uptick in prices for fuel and crop nutrients since the US launched its attack on Iran in February came with American farmers already struggling after years of low grain prices and falling incomes.
Many also see themselves as casualties of Trump’s trade wars, which they say have hurt US agricultural exports, particularly soyabean sales to China.
“This is the worst financial downturn in the sector since the 1980s,” said John Hansen, president of Nebraska Farmers Union.
A recent study by the American Farm Bureau Federation, an industry group, found that, without government assistance, farmers growing nine principal crops — including corn — will lose $31bn this year and $32bn in 2027. (…)
Trump has vowed to support farmers, saying in June that “we’re never going to let you down”. In the same month his administration requested an $11bn funding package for farmers that would provide emergency assistance to row crop and speciality crop producers. But farming groups say it is not enough.
Some of his attempts to tackle rising food prices have triggered a backlash from the agricultural sector. Last week he enraged cattle farmers by announcing a 90-day waiver of tariffs on up to 300,000 tonnes of beef imports, a move some ranchers called a “betrayal”.
But many farmers say it is Trump’s war in Iran that has had the most sweeping effect on their businesses. The sharp slowdown in traffic through the Strait of Hormuz has pushed up the price of diesel and disrupted the global supply of fertiliser, which had already surged in 2022 following Russia’s full-scale invasion of Ukraine. (…)
The average cost for diesel — widely used to power agricultural equipment — has shot up to $5.45 a gallon nationwide, compared with $3.81 before the war, according to the US Energy Information Administration.
Interest payments, labour costs and the price of farm machinery had also increased, said Brad Lubben, a professor of agricultural economics at the University of Nebraska-Lincoln.
“If you look at all the components of the production budget, most of them have gone up substantially over the past few years,” he said. (…)
It’s not limited to farming as Ed Yardeni illustrates:
Even excluding energy and food, costs are rising 5-6%:
US Eyes China Overcapacity Tariffs of 7.5% Before Xi Visits
The US is set to impose a 7.5% tariff on Chinese goods over allegations of excess manufacturing capacity before a planned summit between Xi Jinping and Donald Trump next month, according to people familiar with the matter.
The move would restore Trump’s second-term duties on China to around 20%, a level Beijing has previously said is consistent with its trade truce with Washington. Those come on top of other levies imposed during Trump’s first term and extended during the Biden administration.
It would mark the latest step by Trump to resurrect his protectionist trade agenda after the Supreme Court struck down his previous import taxes on products from China and dozens of other economies, while stopping short of escalating the trade conflict with Beijing beyond the agreed-upon threshold. (…)
Beijing and Washington are also looking to extend their so-called trade pact, which established a one-year truce that’s set to expire on Nov. 10, they said. (…)
The administration is justifying its new global duties under the findings of its investigations into forced labor and industrial overcapacity in the economies of dozens of trading partners. (…)
Nomura’s Chip Shortage Index is near a record high, signaling a deep, AI-driven semiconductor shortage. (Daily Shot)
