Crude Oil Market Update

• Market grapevine indicates that Saudi Aramco is offering additional crude cargoes to Asian refiners via ship-to-ship transfers off Oman’s Sohar port to bypass Strait of Hormuz risks after drone attacks disrupted the East-West pipeline and suspended Yanbu loadings, while increased Gulf loadings and potential shipment delays or cancellations highlight ongoing regional supply constraints.
• Strait of Hormuz vessel traffic fell to 4 transits on Tuesday from 7 the previous day, far below the 10-day average of 18, with no VLCCs or LNG tankers recorded, while Bab el-Mandeb traffic remained relatively stable at 22 vessels versus 24 a day earlier.
• China’s refinery throughput increased by 11.2% MoM to 13.91MBpd in Aug’26, marking the second consecutive monthly rise, supported by stronger fuel exports after restrictions were eased in mid Jul’26.However, throughput remained 6.9% lower YoY, while domestic crude production rose by 0.8% YoY to 4.34 MBpd.
• China’s seaborne crude arrivals are expected to recover to around 8 MBpd in Sep’26–Oct’26, supported by ample onshore inventories, although an estimated 0.639 MBpd inventory draw in Aug’26 highlights tighter stock levels. Meanwhile, Jan’26–Aug’26 refinery throughput stood at 13.7 MBpd, down by 6.6% YoY, while crude production increased by 0.9% to 4.42 MBpd.
• China’s refinery throughput increased by 11.2% MoM to 13.91MBpd in Aug’26, marking the second consecutive monthly rise, supported by stronger fuel exports after restrictions were eased in mid Jul’26.However, throughput remained 6.9% lower YoY, while domestic crude production rose by 0.8% YoY to 4.34 MBpd.
• China’s seaborne crude arrivals are expected to recover to around 8 MBpd in Sep’26–Oct’26, supported by ample onshore inventories, although an estimated 0.639 MBpd inventory draw in Aug’26 highlights tighter stock levels. Meanwhile, Jan’26–Aug’26 refinery throughput stood at 13.7 MBpd, down by 6.6% YoY, while crude production increased by 0.9% to 4.42 MBpd.
• Ukrainian drone strikes are disrupting Russian refining operations and tightening regional fuel supplies with 3 of Russia’s 6 largest diesel producing refineries accounting for around 50% of the country’s diesel output either halting or sharply reducing production in Sep’26 with Kirishi refinery shutting completely, while NORSI and Volgograd are operating at only around 25% of capacity.
• The IEA expects global oil supply to decline by 5.7 MBpd (6.0%) in 2026, deeper than its earlier forecast of drop of around 4.0%, as Middle East conflict delays the recovery of Gulf flows into 2027. Global oil demand is also projected to fall by 2.5 MBpd, versus the previous estimate of a 1.6 MBpd decline, while inventories dropped by 3.1 MBpd in Aug’26 to their lowest level since 2023.
• Saudi Arabia’s crude supply fell by 2.30 MBpd MoM to 6.00 MBpd in Aug’26, the lowest in over 30 years, following attacks on key energy infrastructure and shipping routes. The IEA also cut its 2026 Saudi crude supply forecast by 0.88 MBpd to 7.60 MBpd, while crude loadings declined to 3.50 MBpd.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

War Front: Escalation Spreads to Saudi Arabia and Red Sea.
The war continued to widen as Houthi attacks on Saudi Arabia triggered further Saudi airstrikes in Yemen and expanded security alerts across the kingdom, including near Mecca, while shipping through the Strait of Hormuz fell to just four vessels on Tuesday. The disruption to Hormuz and Saudi oil infrastructure is keeping energy markets tight, with Brent above USD 107/bbl, increasing geopolitical risk premiums and raising energy and logistics risks for GCC aluminum smelters. although crude oil prices eased on Wednesday after a larger-than-expected build in U.S. crude inventories.

The U.S Federal Reserve raised its benchmark interest rate by 25 bps to 3.75%-4.00%, marking its first rate hike since July 2023. The decision came amid persistent inflationary pressures, with the Fed stating that inflation remains elevated and that the latest rate increase would support a more timely return toward its 2% inflation target. The Fed’s updated projections indicate that 16 of 18 policymakers expect at least one more 25-bps rate hike by the end of 2026, taking the policy rate to 4.00%-4.25%. Policymakers also raised their 2026 inflation forecast, reflecting continued concerns over price pressures, particularly from higher energy costs. The Fed’s hawkish stance provides a positive backdrop for the USD and weigh on metal prices. This may keep the impact on INR relatively contained, with oil prices, capital flows and RBI intervention remaining key drivers.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 7.1% on a monthly basis due to raw material price surge.

Base metals:

• LME 3M copper are down 3% on a weekly basis supported by stronger dollar, rate hike, and market moving back into contango structure. Copper prices fell sharply after the White House delayed decision on tariffs on refined copper.
• Aluminum prices are down 1.3% on a weekly basis due to pressure from rate hike, recovering GCC smelter production improving regional availability, and a strong US dollar offsetting support from renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• Market grapevine indicates that Saudi Aramco is offering additional crude cargoes to Asian refiners via ship-to-ship transfers off Oman’s Sohar port to bypass Strait of Hormuz risks after drone attacks disrupted the East-West pipeline and suspended Yanbu loadings, while increased Gulf loadings and potential shipment delays or cancellations highlight ongoing regional supply constraints.
• Strait of Hormuz vessel traffic fell to 4 transits on Tuesday from 7 the previous day, far below the 10-day average of 18, with no VLCCs or LNG tankers recorded, while Bab el-Mandeb traffic remained relatively stable at 22 vessels versus 24 a day earlier.
• China’s refinery throughput increased by 11.2% MoM to 13.91MBpd in Aug’26, marking the second consecutive monthly rise, supported by stronger fuel exports after restrictions were eased in mid Jul’26.However, throughput remained 6.9% lower YoY, while domestic crude production rose by 0.8% YoY to 4.34 MBpd.
• China’s seaborne crude arrivals are expected to recover to around 8 MBpd in Sep’26–Oct’26, supported by ample onshore inventories, although an estimated 0.639 MBpd inventory draw in Aug’26 highlights tighter stock levels. Meanwhile, Jan’26–Aug’26 refinery throughput stood at 13.7 MBpd, down by 6.6% YoY, while crude production increased by 0.9% to 4.42 MBpd.
• China’s refinery throughput increased by 11.2% MoM to 13.91MBpd in Aug’26, marking the second consecutive monthly rise, supported by stronger fuel exports after restrictions were eased in mid Jul’26.However, throughput remained 6.9% lower YoY, while domestic crude production rose by 0.8% YoY to 4.34 MBpd.
• China’s seaborne crude arrivals are expected to recover to around 8 MBpd in Sep’26–Oct’26, supported by ample onshore inventories, although an estimated 0.639 MBpd inventory draw in Aug’26 highlights tighter stock levels. Meanwhile, Jan’26–Aug’26 refinery throughput stood at 13.7 MBpd, down by 6.6% YoY, while crude production increased by 0.9% to 4.42 MBpd.
• Ukrainian drone strikes are disrupting Russian refining operations and tightening regional fuel supplies with 3 of Russia’s 6 largest diesel producing refineries accounting for around 50% of the country’s diesel output either halting or sharply reducing production in Sep’26 with Kirishi refinery shutting completely, while NORSI and Volgograd are operating at only around 25% of capacity.
• The IEA expects global oil supply to decline by 5.7 MBpd (6.0%) in 2026, deeper than its earlier forecast of drop of around 4.0%, as Middle East conflict delays the recovery of Gulf flows into 2027. Global oil demand is also projected to fall by 2.5 MBpd, versus the previous estimate of a 1.6 MBpd decline, while inventories dropped by 3.1 MBpd in Aug’26 to their lowest level since 2023.
• Saudi Arabia’s crude supply fell by 2.30 MBpd MoM to 6.00 MBpd in Aug’26, the lowest in over 30 years, following attacks on key energy infrastructure and shipping routes. The IEA also cut its 2026 Saudi crude supply forecast by 0.88 MBpd to 7.60 MBpd, while crude loadings declined to 3.50 MBpd.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

War Front: Escalation Spreads to Saudi Arabia and Red Sea.
The war continued to widen as Houthi attacks on Saudi Arabia triggered further Saudi airstrikes in Yemen and expanded security alerts across the kingdom, including near Mecca, while shipping through the Strait of Hormuz fell to just four vessels on Tuesday. The disruption to Hormuz and Saudi oil infrastructure is keeping energy markets tight, with Brent above USD 107/bbl, increasing geopolitical risk premiums and raising energy and logistics risks for GCC aluminum smelters. although crude oil prices eased on Wednesday after a larger-than-expected build in U.S. crude inventories.

The U.S Federal Reserve raised its benchmark interest rate by 25 bps to 3.75%-4.00%, marking its first rate hike since July 2023. The decision came amid persistent inflationary pressures, with the Fed stating that inflation remains elevated and that the latest rate increase would support a more timely return toward its 2% inflation target. The Fed’s updated projections indicate that 16 of 18 policymakers expect at least one more 25-bps rate hike by the end of 2026, taking the policy rate to 4.00%-4.25%. Policymakers also raised their 2026 inflation forecast, reflecting continued concerns over price pressures, particularly from higher energy costs. The Fed’s hawkish stance provides a positive backdrop for the USD and weigh on metal prices. This may keep the impact on INR relatively contained, with oil prices, capital flows and RBI intervention remaining key drivers.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 7.1% on a monthly basis due to raw material price surge.

Base metals:

• LME 3M copper are down 3% on a weekly basis supported by stronger dollar, rate hike, and market moving back into contango structure. Copper prices fell sharply after the White House delayed decision on tariffs on refined copper.
• Aluminum prices are down 1.3% on a weekly basis due to pressure from rate hike, recovering GCC smelter production improving regional availability, and a strong US dollar offsetting support from renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• Strait of Hormuz vessel traffic fell to just 4 transits on 15th Sep’26 from 7 a day earlier and well below the 10 day average of 18, with no VLCCs or LNG tankers transiting, while Bab el-Mandeb traffic remained relatively stable at 22 vessels on 15th Sep’26 versus 24 on 14th Sep’26, highlighting continued shipping and supply risks.
• Attacks on Saudi Arabia’s East-West Pipeline on Friday forced the country to shut the pipeline, raising concerns over sour crude supplies to Asia and contributing to a 3% rise in oil prices on Monday. Saudi’s Red Sea crude loadings from Yanbu had already plunged to 0.50 – 1.00 MBpd in Jul’26 from around 6.00 MBpd in Jun’26, intensifying supply concerns.
• To offset the disruption caused by the shutdown of Saudi Arabia’s East-West pipeline after drone attacks, crude loadings from Saudi Arabia’s Ras Tanura and Juaymah terminals have doubled to around 4MBpd, equivalent to roughly 2 VLCCs per day, with 4 VLCCs carrying up to 8mln barrels at Ras Tanura on 16th Sep’26.
• China’s refinery throughput increased by 11.2% MoM to 13.91MBpd in Aug’26, marking the second consecutive monthly rise, supported by stronger fuel exports after restrictions were eased in mid Jul’26.However, throughput remained 6.9% lower YoY, while domestic crude production rose by 0.8% YoY to 4.34 MBpd.
• China’s seaborne crude arrivals are expected to recover to around 8 MBpd in Sep’26–Oct’26, supported by ample onshore inventories, although an estimated 0.639 MBpd inventory draw in Aug’26 highlights tighter stock levels. Meanwhile, Jan’26–Aug’26 refinery throughput stood at 13.7 MBpd, down by 6.6% YoY, while crude production increased by 0.9% to 4.42 MBpd.
• Ukrainian drone strikes are disrupting Russian refining operations and tightening regional fuel supplies with 3 of Russia’s 6 largest diesel producing refineries accounting for around 50% of the country’s diesel output either halting or sharply reducing production in Sep’26 with Kirishi refinery shutting completely, while NORSI and Volgograd are operating at only around 25% of capacity.
• The IEA expects global oil supply to decline by 5.7 MBpd (6.0%) in 2026, deeper than its earlier forecast of drop of around 4.0%, as Middle East conflict delays the recovery of Gulf flows into 2027. Global oil demand is also projected to fall by 2.5 MBpd, versus the previous estimate of a 1.6 MBpd decline, while inventories dropped by 3.1 MBpd in Aug’26 to their lowest level since 2023.
• Saudi Arabia’s crude supply fell by 2.30 MBpd MoM to 6.00 MBpd in Aug’26, the lowest in over 30 years, following attacks on key energy infrastructure and shipping routes. The IEA also cut its 2026 Saudi crude supply forecast by 0.88 MBpd to 7.60 MBpd, while crude loadings declined to 3.50 MBpd.
• Rosneft’s Ryazan refinery halted operations following a 06th Sep’26 drone attack, with its CDU-6 unit (160 kbpd production capacity) and CDU-4 unit (80 kbpd production capacity) taken offline, while CDU-3 remains under maintenance, potentially affecting around 240 kbpd of crude-processing capacity.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Escalation Raises Risks to Hormuz Shipping and Gulf Energy Infrastructure: US-Iran tensions remain elevated, with Iran threatening further retaliation against U.S. military action and warning that Gulf energy infrastructure could be targeted. Tehran is also preparing to establish a restricted maritime zone around the Strait of Hormuz, increasing the risk of prolonged disruption to regional shipping. Shipping activity through the Strait of Hormuz has fallen sharply. Only 7 commodity vessels crossed the strait on Monday, down from 8 on Sunday, while traffic averaged around 10 vessels per day over the past 10 days, the lowest level since May. Qatar has warned that prolonged disruption could lead to an “industrial catastrophe.” The disruption continues to support energy prices, with Brent trading around USD 97/bbl.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 8% on a monthly basis due to raw material price surge.

Base metals:

• LME 3M copper are down 3.4% on a weekly basis supported by stronger dollar and market moving back into contango structure. Copper prices fell sharply after the White House delayed a decision on tariffs on refined copper and copper concentrate, as policymakers weigh the benefits of supporting U.S. domestic mining against the risk of higher copper prices increasing manufacturing costs and hurting affordability ahead of the November midterm elections.
• Aluminum prices are broadly stable on a weekly basis due to support from renewed tensions in West Asia offsetting pressure from rate hike expectations.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The latest escalation came after Houthi militants seized control of Yemen’s port city of Mocha and increased attacks around the Bab el-Mandeb Strait, creating an additional threat to crude and refined-product flows through the Red Sea, while continued disruption in the Strait of Hormuz further tightened supply concerns, with only seven vessels transiting the strait on 09th Sep’26, around half of the 10-day average.
• The risk to Saudi Arabian oil exports has also increased, as Houthi attacks could disrupt the Red Sea route that Saudi Arabia is increasingly relying on to bypass Hormuz.
• Meanwhile, the US President Trump said he expects the US–Iran war to end immediately after the midterm elections and indicated that oil prices would decline following the end of the conflict, although the immediate market reaction remains bullish as renewed attacks continue to threaten regional supply and shipping flows.
• Vessel traffic through the Strait of Hormuz fell to seven on 10th Sep’26 from 11 the previous day, well below the 10-day average of 15, while 26 commodity vessels transited the Bab el-Mandeb Strait versus a 10-day average of 27, highlighting continued disruption in Hormuz despite the first Qatar-linked LNG shipment since late Jul’26.
• China’s seaborne crude oil imports increased marginally to 7.14 MBpd in Aug’26 from 6.93 MBpd in Jul’26, but remained 4.27 MBpd (37%) below the pre-conflict average of 11.41 MBpd, as constrained Middle East flows and elevated crude prices continued to limit imports.
• Meanwhile, China increased seaborne crude imports from Russia to 1.68 MBpd in Aug’26 from 1.40 MBpd in Jul’26, while light and middle distillate exports rose to 0.96 MBpd from 0.77 MBpd, suggesting that higher refinery product exports could support further crude imports if Asian product margins remain elevated..
• The US national average diesel price surpassed 6 USD/gal for the first time on 11th Sep’26, driven by supply disruptions from the US–Iran conflict and attacks on Russian refineries, increasing transportation, freight, agricultural, and logistics costs and thereby adding further inflationary pressure across the US economy, particularly as higher operating and delivery costs are passed through to consumers and businesses.
• Market grapevine indicates that the global diesel markets are expected to remain tight as disruptions have removed nearly 2.00 MBpd of Russian and 2.00 MBpd of Middle Eastern product supplies, while limited spare refining capacity and approaching winter demand are supporting record high diesel margins, with US diesel crack spreads reaching 108.02 USD/bbl.
• Rosneft’s Ryazan refinery halted operations following a 06th Sep’26 drone attack, with its CDU-6 unit (160 kbpd production capacity) and CDU-4 unit (80 kbpd production capacity) taken offline, while CDU-3 remains under maintenance, potentially affecting around 240 kbpd of crude-processing capacity.
• The refinery processed approximately 13.1 mln tons (96 mln bbl) of crude in 2024, representing about 4.9% of Russia’s total refining throughput, and produced 2.2 mln tons (16.1 mln bbl) of gasoline, 3.4 mln tons (24.9 mln bbl) of diesel, and 4.3 mln tons (31.5 mln bbl) of fuel oil.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The latest escalation came after Houthi militants seized control of Yemen’s port city of Mocha and increased attacks around the Bab el-Mandeb Strait, creating an additional threat to crude and refined-product flows through the Red Sea, while continued disruption in the Strait of Hormuz further tightened supply concerns, with only seven vessels transiting the strait on 09th Sep’26, around half of the 10-day average.
• The risk to Saudi Arabian oil exports has also increased, as Houthi attacks could disrupt the Red Sea route that Saudi Arabia is increasingly relying on to bypass Hormuz.
• Meanwhile, the US President Trump said he expects the US–Iran war to end immediately after the midterm elections and indicated that oil prices would decline following the end of the conflict, although the immediate market reaction remains bullish as renewed attacks continue to threaten regional supply and shipping flows.
• Vessel traffic through the Strait of Hormuz fell to seven on 10th Sep’26 from 11 the previous day, well below the 10-day average of 15, while 26 commodity vessels transited the Bab el-Mandeb Strait versus a 10-day average of 27, highlighting continued disruption in Hormuz despite the first Qatar-linked LNG shipment since late Jul’26.
• China’s seaborne crude oil imports increased marginally to 7.14 MBpd in Aug’26 from 6.93 MBpd in Jul’26, but remained 4.27 MBpd (37%) below the pre-conflict average of 11.41 MBpd, as constrained Middle East flows and elevated crude prices continued to limit imports.
• Meanwhile, China increased seaborne crude imports from Russia to 1.68 MBpd in Aug’26 from 1.40 MBpd in Jul’26, while light and middle distillate exports rose to 0.96 MBpd from 0.77 MBpd, suggesting that higher refinery product exports could support further crude imports if Asian product margins remain elevated..
• The US national average diesel price surpassed 6 USD/gal for the first time on 11th Sep’26, driven by supply disruptions from the US–Iran conflict and attacks on Russian refineries, increasing transportation, freight, agricultural, and logistics costs and thereby adding further inflationary pressure across the US economy, particularly as higher operating and delivery costs are passed through to consumers and businesses.
• Market grapevine indicates that the global diesel markets are expected to remain tight as disruptions have removed nearly 2.00 MBpd of Russian and 2.00 MBpd of Middle Eastern product supplies, while limited spare refining capacity and approaching winter demand are supporting record high diesel margins, with US diesel crack spreads reaching 108.02 USD/bbl.
• Rosneft’s Ryazan refinery halted operations following a 06th Sep’26 drone attack, with its CDU-6 unit (160 kbpd production capacity) and CDU-4 unit (80 kbpd production capacity) taken offline, while CDU-3 remains under maintenance, potentially affecting around 240 kbpd of crude-processing capacity.
• The refinery processed approximately 13.1 mln tons (96 mln bbl) of crude in 2024, representing about 4.9% of Russia’s total refining throughput, and produced 2.2 mln tons (16.1 mln bbl) of gasoline, 3.4 mln tons (24.9 mln bbl) of diesel, and 4.3 mln tons (31.5 mln bbl) of fuel oil.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The US-Iran conflict escalated sharply as Iran attacked a US base in Jordan and 10 vessels near the Strait of Hormuz, while the US destroyed five Iranian oil tankers and Iran-aligned Houthis targeted Saudi Arabian cities and oil infrastructure, heightening concerns over regional supply and shipping disruptions.
• Commodity vessel traffic through the Strait of Hormuz fell to six vessels on 08th Sep’26 from nine on 07th Sep’26 and remained below the 10-day average of 12 vessels, while Bab el-Mandeb traffic declined to 25 vessels from the 10-day average of 27, highlighting continued disruption to key Middle East shipping routes.
• China’s seaborne crude oil imports increased marginally to 7.14 MBpd in Aug’26 from 6.93 MBpd in Jul’26, but remained 4.27 MBpd (37%) below the pre-conflict average of 11.41 MBpd, as constrained Middle East flows and elevated crude prices continued to limit imports.
• Meanwhile, China increased seaborne crude imports from Russia to 1.68 MBpd in Aug’26 from 1.40 MBpd in Jul’26, while light and middle distillate exports rose to 0.96 MBpd from 0.77 MBpd, suggesting that higher refinery product exports could support further crude imports if Asian product margins remain elevated.
• Demand from major Asian buyers, particularly China and India, also strengthened, with Chinese refiners purchasing at least 16 mln bbl of Basrah crude for Sep’26 delivery, while Reliance Industries received around 4 mln bbl in Aug’26 which is improving the availability of heavy, high sulphur Iraqi crude in Asian markets.
• Market grapevine indicates that the global diesel markets are expected to remain tight as disruptions have removed nearly 2.00 MBpd of Russian and 2.00 MBpd of Middle Eastern product supplies, while limited spare refining capacity and approaching winter demand are supporting record high diesel margins, with US diesel crack spreads reaching 108.02 USD/bbl.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The US-Iran conflict escalated sharply as Iran attacked a US base in Jordan and 10 vessels near the Strait of Hormuz, while the US destroyed five Iranian oil tankers and Iran-aligned Houthis targeted Saudi Arabian cities and oil infrastructure, heightening concerns over regional supply and shipping disruptions.
• Commodity vessel traffic through the Strait of Hormuz fell to six vessels on 08th Sep’26 from nine on 07th Sep’26 and remained below the 10-day average of 12 vessels, while Bab el-Mandeb traffic declined to 25 vessels from the 10-day average of 27, highlighting continued disruption to key Middle East shipping routes.
• China’s seaborne crude oil imports increased marginally to 7.14 MBpd in Aug’26 from 6.93 MBpd in Jul’26, but remained 4.27 MBpd (37%) below the pre-conflict average of 11.41 MBpd, as constrained Middle East flows and elevated crude prices continued to limit imports.
• Meanwhile, China increased seaborne crude imports from Russia to 1.68 MBpd in Aug’26 from 1.40 MBpd in Jul’26, while light and middle distillate exports rose to 0.96 MBpd from 0.77 MBpd, suggesting that higher refinery product exports could support further crude imports if Asian product margins remain elevated.
• Demand from major Asian buyers, particularly China and India, also strengthened, with Chinese refiners purchasing at least 16 mln bbl of Basrah crude for Sep’26 delivery, while Reliance Industries received around 4 mln bbl in Aug’26 which is improving the availability of heavy, high sulphur Iraqi crude in Asian markets.
• Market grapevine indicates that the global diesel markets are expected to remain tight as disruptions have removed nearly 2.00 MBpd of Russian and 2.00 MBpd of Middle Eastern product supplies, while limited spare refining capacity and approaching winter demand are supporting record high diesel margins, with US diesel crack spreads reaching 108.02 USD/bbl.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The US carried out its latest strikes on IRGC targets in Iran, including air defences, radar and maritime assets, prompting Iranian retaliation against US positions across the region and intensifying concerns over energy supply disruptions, despite 17 mln bbl of oil reportedly transiting the Strait of Hormuz on 31st Aug’26.
• Strait of Hormuz traffic weakened with only 6 commodity vessels transiting on 2nd Aug’26 versus 11 the previous day, while Iran tightened restrictions on non-compliant vessels, raising concerns over further disruptions to regional oil flows.
• Demand from major Asian buyers, particularly China and India, also strengthened, with Chinese refiners purchasing at least 16 mln bbl of Basrah crude for Sep’26 delivery, while Reliance Industries received around 4 mln bbl in Aug’26 which is improving the availability of heavy, high sulphur Iraqi crude in Asian markets.
• The US is planning to replenish its Strategic Petroleum Reserve (SPR) using oil secured under its recent Venezuela deal, following a release of up to 172 mln bbl during the Iran war that has pushed the SPR to a 44 year low but due to the high sulfur and heavy nature of Venezuelan crude it may be swapped with light or medium density US crude oil.
• Middle Eastern light and middle distillate exports declined to 2.14 MBpd in Aug’26 from 2.58 MBpd in Jul’26 and were 55% below the pre-war average of 4.49 MBpd, pushing Singapore gasoil prices up 70% to 155.15 USD/bbl and gasoil refining margins to 67.93 USD/bbl.
• China is expected to maintain refined fuel exports at 1.00 MBpd in Sep’26, broadly above the 2025 monthly average of 0.74 MBpd, as refiners benefit from higher overseas margins and easing export controls.
• Jet fuel is expected to lead at up to 0.58 MBpd, followed by diesel at 0.25 MBpd and gasoline at up to 0.17 MBpd, adding supply to Asian markets and potentially limiting further price gains.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• The US carried out its latest strikes on IRGC targets in Iran, including air defences, radar and maritime assets, prompting Iranian retaliation against US positions across the region and intensifying concerns over energy supply disruptions, despite 17 mln bbl of oil reportedly transiting the Strait of Hormuz on 31st Aug’26.
• Strait of Hormuz traffic weakened with only 6 commodity vessels transiting on 2nd Aug’26 versus 11 the previous day, while Iran tightened restrictions on non-compliant vessels, raising concerns over further disruptions to regional oil flows.
• Demand from major Asian buyers, particularly China and India, also strengthened, with Chinese refiners purchasing at least 16 mln bbl of Basrah crude for Sep’26 delivery, while Reliance Industries received around 4 mln bbl in Aug’26 which is improving the availability of heavy, high sulphur Iraqi crude in Asian markets.
• The US is planning to replenish its Strategic Petroleum Reserve (SPR) using oil secured under its recent Venezuela deal, following a release of up to 172 mln bbl during the Iran war that has pushed the SPR to a 44 year low but due to the high sulfur and heavy nature of Venezuelan crude it may be swapped with light or medium density US crude oil.
• Middle Eastern light and middle distillate exports declined to 2.14 MBpd in Aug’26 from 2.58 MBpd in Jul’26 and were 55% below the pre-war average of 4.49 MBpd, pushing Singapore gasoil prices up 70% to 155.15 USD/bbl and gasoil refining margins to 67.93 USD/bbl.
• China is expected to maintain refined fuel exports at 1.00 MBpd in Sep’26, broadly above the 2025 monthly average of 0.74 MBpd, as refiners benefit from higher overseas margins and easing export controls.
• Jet fuel is expected to lead at up to 0.58 MBpd, followed by diesel at 0.25 MBpd and gasoline at up to 0.17 MBpd, adding supply to Asian markets and potentially limiting further price gains.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.

Crude Oil Market Update

• Tensions between the US and Iran escalated after US forces struck Iranian missile-launching facilities on Larak Island and Iran retaliated against US bases in Jordan, while Trump claimed (without independent evidence) that Kharg Island, which previously handled around 90% of Iran’s oil exports, was under attack, raising fresh concerns over oil supplies and Strait of Hormuz shipping.
• President Trump is expected to meet major US refiners and fuel retailers next week to push for lower gasoline prices as the administration seeks to ease consumer costs and counter political pressure from the Iran war ahead of the Nov'26 midterm elections.
• Iran and Oman are working toward a designated shipping corridor through the Strait of Hormuz, as Qatar pushes Tehran to restore freedom of navigation, while Iran prepares conditions for reopening the waterway, including sanctions relief and an end to the US blockade of its ports.
• Shipping traffic through the Strait of Hormuz rose slightly to 10 vessels on 26 Aug'26 from 8 on 25 Aug'26, but remained below normal levels amid ongoing US-Iran tensions and talks, while Bab el-Mandeb traffic fell to 19 vessels on 26 Aug'26 from 24 on 25 Aug'26 highlighting cautious movement through these key routes.
• Kuwait Integrated Petroleum Industries had restarted all three crude units at its 0.62 MBpd Al-Zour refinery at around 60% capacity on 19 Aug'26 which had been damaged in an Iranian drone attack in May'26 disrupting its operations.
• Venezuela is considering leaving OPEC as it strengthens ties with the US, after years of failing to meet OPEC production quotas due to underinvestment, neglect and corruption in its state-run oil industry, potentially weakening OPEC’s influence over global oil markets.
• According to market grapevine, Asia’s crude imports are projected at 23.12 MBpd in Aug'26, down by 14% (~3.8 MBpd) from the pre war average of 26.91 MBpd, while only 2.3 MBpd of crude exports has been tracked through the Strait of Hormuz, compared with 15.82 MBpd before the conflict, highlighting continued disruption to Middle Eastern oil flows.

War Impact on Crude Oil & Gasoil/Diesel Prices

War Impact on Gasoline, ATF & Natural Gas Prices

Strategic Petroleum Release

Key Supply Infrastructure

GCC Bypass Pipelines Running Near Capacity — But Shah Gas Field Ablaze and Fujairah Zone Struck

• Saudi Arabia's East-West pipeline is pumping oil at its full capacity of 7 MBpd, bypassing the Strait of Hormuz. Crude oil exports from Yanbu port have reached 5 MBpd, and the country is also exporting 0.70 to 0.90 MBpd of oil products.
• Of approximately 15 MBpd of crude transiting the Strait of Hormuz in OND'25, combined SPR releases and bypass pipeline capacity can offset roughly two-thirds — or slightly more — for the next 20 to 30 days, providing the Trump administration a window to assess strategic direction.
• New strikes directly threaten this buffer — Iranian drones struck the UAE's Shah gas field (currently ablaze) and the Fujairah Oil Industry Zone on Mar 17. A tanker was also hit near the Strait of Hormuz. Saudi Arabia intercepted over a dozen drones; Kuwait and Bahrain sustained additional attacks. These represent the first direct strikes on GCC energy export infrastructure since the conflict began.

Supply Analysis

Supply & Demand Analysis

War Scenarios Point to Global Supply Deficit of 0.92–1.07 MBpd in 2026 and AMJ Quarter Most Severe with a deficit of 4.10 MBpd.

Pre-war, global supply and demand were near-balanced with a modest surplus of +0.55 MBpd projected for 2026. Both conflict scenarios introduce significant supply deficits driven by Strait of Hormuz disruptions and impacts on Iraq and Kuwait crude production.

• Scenario 1 (Preferred): Ceasefire talks continue to progress positively, with tanker flows through the Strait of Hormuz gradually normalizing over the next 4–5 weeks. Supply recovers steadily, while demand improves at a slower pace and remains below pre-war expectations, resulting in a moderate market surplus.
• Scenario 2 (Alternate): The Strait of Hormuz normalizes over the next 4–5 weeks, supporting a gradual recovery in oil exports and supply. Demand rebounds more strongly than in Scenario 1, reducing the market surplus, although overall consumption remains below pre-war levels.

Metals & Energy Market Update – Geopolitical Context (Iran Conflict)

Geopolitical backdrop:

US-Iran Hostilities Reignite, Raising Hormuz Risk: U.S.-Iran tensions remain elevated following renewed military exchanges. U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The renewed conflict has pushed Brent crude oil above USD 95/bbl, as concerns over potential supply disruptions and reduced shipping activity through the Strait of Hormuz added a significant geopolitical risk premium to energy markets.

Steel:

• Steel supply chains remain largely insulated from the Middle East conflict.
• Moreover, HRC prices are up by 1% on a monthly basis due to raw material price surge.

Base metals:

• Copper prices are down 1.2% on a weekly basis as Kevin Warsh's Jackson Hole speech renewed rate hike expectations citing inflationary concerns. Further, escalation in the Gulf, weak Chinese economic data, and inventory buildup is weighing on market sentiments. However, downside remains capped due to supply tightness, CME-LME spread, backwardation structure, and lowered production guidance in Chile.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions in West Asia.

Precious metals:

• Stronger U.S. yields and weak industrial offtake are suppressing any upside momentum.
• Stronger US Dollar and geopolitical tensions are weighing on precious metal prices.

LPG Market Update

LPG Market Update

• For August 2026, Saudi Aramco Contract Prices (CPs) rebounded to USD 620/ton for propane and USD 640/ton for butane, compared with USD 580/ton and USD 600/ton, respectively, in July. This represents a 6.9% month-on-month increase in propane CPs and a 6.7% month-on-month increase in butane CPs.
• Sonatrach raised its August propane OSP by 4.2% m-o-m, from $518/ton to $540/ton, while the butane OSP was cut by 5.0%, from $600/ton to $570/ton.

• India’s commercial LPG prices eased further in August, with the 19 kg cylinder price in New Delhi declining by ₹192, from ₹2,930 in July to ₹2,738 as of 3 August 2026. Despite the recent correction, commercial LPG remains substantially above its pre-war level of ₹1,741/cylinder. In contrast, the 14.2 kg domestic LPG cylinder remained unchanged at ₹942, reflecting continued price stability for household consumers.