Crude Oil Market Update

• The US-Iran tensions intensified after the ceasefire expired, with Trump denying ongoing talks and saying the Strait of Hormuz was open while Iran maintained it was closed, disrupting shipping and pushing oil prices higher amid fears of prolonged conflict, inflation and economic damage.
• Iran is preparing to shift to a “fully offensive” military posture as efforts to reach a permanent peace deal with the US have stalled, threatening prolonged disruption to tanker traffic through the Strait of Hormuz, while Washington has ruled out extending the temporary ceasefire.
• Saudi Aramco has resumed oil loadings through the Strait of Hormuz, with 3 VLCCs loading about 6 mln bbl between 12th Aug'26 –16th Aug'26 and 6 more VLCCs potentially scheduled later this month, while alternative exports via Egypt’s Sidi Kerir are expected to reach only 0.67 MBpd, far below the pre-blockade level of 4 million bpd.
• Russia plans to reroute Kazakhstan’s KEBCO crude from Ust-Luga to Novorossiysk from late Aug'26 through at least Sept'26, redirecting at least 2 cargoes and freeing around 0.10 MBpd of Baltic capacity for additional Russian oil exports amid Black Sea security and tanker shortages.
• Market grapevine indicates that the US diesel crack reached a record 102.20 USD/bbl on 17th Aug'26 amid global supply disruptions, while global refinery throughput fell by 5.0 MBpd YoY to 80.9 MBpd in Jul'26 and the US distillate inventories dropped to 107.1 mln bbl, the lowest seasonal level since 1996.
• China recorded a 0.21 MBpd crude surplus in Jul'26 despite imports falling to 8.41 MBpd, as refinery throughput dropped 15.8% YoY to 12.51 MBpd, while crude inventories have still increased by around 0.48 MBpd year to date despite imports remaining over 3.00 MBpd below pre-war levels.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.

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:

U.S.-Iran Tensions Rise as MoU Expires Without a Deal: The geopolitical tensions between the U.S. and Iran have intensified after President Trump ruled out extending the June memorandum of understanding (MoU), leaving no clear timeline for a resolution. Iran has responded firmly, while U.S. officials have signaled that Washington is prepared for a prolonged confrontation and may impose further sanctions. With talks stalled and the dispute over the Strait of Hormuz still unresolved, concerns remain over further escalation and continued disruption to regional shipping.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.8%.

Base metals:

• Copper prices are up 3.9% on a weekly basis, as negative retails sales, weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, supply constraints, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and weaker China economic data.
• Aluminum prices are down 1.7% on a weekly basis as due to subdued demand and improving supply conditions although MoU expiration may provide some support.

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 tensions intensified after the ceasefire expired, with Trump denying ongoing talks and saying the Strait of Hormuz was open while Iran maintained it was closed, disrupting shipping and pushing oil prices higher amid fears of prolonged conflict, inflation and economic damage.
• Iran is preparing to shift to a “fully offensive” military posture as efforts to reach a permanent peace deal with the US have stalled, threatening prolonged disruption to tanker traffic through the Strait of Hormuz, while Washington has ruled out extending the temporary ceasefire.
• Saudi Aramco has resumed oil loadings through the Strait of Hormuz, with 3 VLCCs loading about 6 mln bbl between 12th Aug'26 –16th Aug'26 and 6 more VLCCs potentially scheduled later this month, while alternative exports via Egypt’s Sidi Kerir are expected to reach only 0.67 MBpd, far below the pre-blockade level of 4 million bpd.
• Russia plans to reroute Kazakhstan’s KEBCO crude from Ust-Luga to Novorossiysk from late Aug'26 through at least Sept'26, redirecting at least 2 cargoes and freeing around 0.10 MBpd of Baltic capacity for additional Russian oil exports amid Black Sea security and tanker shortages.
• Market grapevine indicates that the US diesel crack reached a record 102.20 USD/bbl on 17th Aug'26 amid global supply disruptions, while global refinery throughput fell by 5.0 MBpd YoY to 80.9 MBpd in Jul'26 and the US distillate inventories dropped to 107.1 mln bbl, the lowest seasonal level since 1996.
• China recorded a 0.21 MBpd crude surplus in Jul'26 despite imports falling to 8.41 MBpd, as refinery throughput dropped 15.8% YoY to 12.51 MBpd, while crude inventories have still increased by around 0.48 MBpd year to date despite imports remaining over 3.00 MBpd below pre-war levels.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.

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:

U.S.-Iran Tensions Rise as MoU Expires Without a Deal: The geopolitical tensions between the U.S. and Iran have intensified after President Trump ruled out extending the June memorandum of understanding (MoU), leaving no clear timeline for a resolution. Iran has responded firmly, while U.S. officials have signaled that Washington is prepared for a prolonged confrontation and may impose further sanctions. With talks stalled and the dispute over the Strait of Hormuz still unresolved, concerns remain over further escalation and continued disruption to regional shipping.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.8%.

Base metals:

• Copper prices are up 3.9% on a weekly basis, as negative retails sales, weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, supply constraints, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and weaker China economic data.
• Aluminum prices are down 1.7% on a weekly basis as due to subdued demand and improving supply conditions although MoU expiration may provide some support.

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

• Iran is preparing to shift to a “fully offensive” military posture as efforts to reach a permanent peace deal with the US have stalled, threatening prolonged disruption to tanker traffic through the Strait of Hormuz, while Washington has ruled out extending the temporary ceasefire.
• Saudi Aramco is privately offering Arab Medium and Arab Heavy crude for Sep'26 loading to Asian refiners via ship-to-ship transfers off Fujairah, allowing buyers to bypass the disrupted Strait of Hormuz, in a strategy similar to ADNOC’s sale of more than 100 mln bbl through tenders.
• Market grapevine indicates that the US diesel crack reached a record 102.20 USD/bbl on 17th Aug'26 amid global supply disruptions, while global refinery throughput fell by 5.0 MBpd YoY to 80.9 MBpd in Jul'26 and the US distillate inventories dropped to 107.1 mln bbl, the lowest seasonal level since 1996.
• China recorded a 0.21 MBpd crude surplus in Jul'26 despite imports falling to 8.41 MBpd, as refinery throughput dropped 15.8% YoY to 12.51 MBpd, while crude inventories have still increased by around 0.48 MBpd year to date despite imports remaining over 3.00 MBpd below pre-war levels.
• Shipping through the Strait of Hormuz nearly ground to a halt, with only 5 commodity vessels transiting on 15th Aug'26 and none on 16th Aug'26, down from 31 the previous weekend and far below the 130+ vessels per day seen before the war, while Bab el-Mandeb traffic fell to 49 vessels from 55 and recorded no Saudi oil shipments.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.
• Iran reportedly attacked an ADNOC vessel in the Strait of Hormuz, marking the third incident involving ADNOC vessels in less than a week, with no injuries reported, further threatening a waterway that handled around one-fifth of global oil and LNG shipments before the conflict.
• Russia suspended crude exports from the Sheskharis terminal at Novorossiysk following a drone attack, disrupting a facility handling around 0.70 MBpd, after crude loadings from the port averaged nearly 1.0 MBpd in Jul'26 and 0.80 MBpd in Jun'26.

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:

U.S.-Iran Tensions Rise as MoU Expires Without a Deal: The geopolitical tensions between the U.S. and Iran have intensified after President Trump ruled out extending the June memorandum of understanding (MoU), leaving no clear timeline for a resolution. Iran has responded firmly, while U.S. officials have signaled that Washington is prepared for a prolonged confrontation and may impose further sanctions. With talks stalled and the dispute over the Strait of Hormuz still unresolved, concerns remain over further escalation and continued disruption to regional shipping.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.8%.

Base metals:

• Copper prices are up 3.9% on a weekly basis, as negative retails sales, weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, supply constraints, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and weaker China economic data.
• Aluminum prices are down 1.7% on a weekly basis as due to subdued demand and improving supply conditions although MoU expiration may provide some support.

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

• Shipping through the Strait of Hormuz nearly ground to a halt, with only 5 commodity vessels transiting on 15th Aug'26 and none on 16th Aug'26, down from 31 the previous weekend and far below the 130+ vessels per day seen before the war, while Bab el-Mandeb traffic fell to 49 vessels from 55 and recorded no Saudi oil shipments.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.
• Iran reportedly attacked an ADNOC vessel in the Strait of Hormuz, marking the third incident involving ADNOC vessels in less than a week, with no injuries reported, further threatening a waterway that handled around one-fifth of global oil and LNG shipments before the conflict.
• The IEA now expects global oil supply to decline by 4.3 MBpd in 2026 to 102.02 MBpd, creating a 1.27 MBpd supply deficit, as renewed Middle East disruptions and the Strait of Hormuz shutdown continue to constrain global flows.
• The agency also projects a 1.8 MBpd market deficit during Jul'26 – Sep'26, while lowering its 2026 oil demand outlook to a 1.6 MBpd contraction, with global refinery throughput falling 5 MBpd YoY in Jul'26.
• India has cut windfall taxes on fuel exports, reducing the diesel levy to ₹24/litre from ₹25.5, petrol duty to zero from ₹3.5, and aviation turbine fuel duty to ₹19.5/litre from ₹22, effective from 15th Aug'26.
• At least four Asian refiners bought US crude for later delivery as the Strait of Hormuz remained effectively closed, with South Korea's GS Caltex purchasing 2 mln bbl of Mars crude, Japan's Eneos buying 2 mln bbl of WTI, and Taiwan's CPC securing 2 mln bbl of WTI, while Asian US crude imports had already reached a record 2.35 MBpd in Jul'26.
• Russia suspended crude exports from the Sheskharis terminal at Novorossiysk following a drone attack, disrupting a facility handling around 0.70 MBpd, after crude loadings from the port averaged nearly 1.0 MBpd in Jul'26 and 0.80 MBpd in Jun'26.
• A drone attack damaged Novatek’s Ust-Luga gas condensate processing complex in Russia, which has three units with a combined capacity of 9.00 mln ton/year and produces significant volumes of light and heavy naphtha, while processing 3.80 mln ton of gas condensate in H1 2026. However, crude oil exports of around 0.70 MBpd from the terminal remained unaffected.

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:

U.S-Iran tensions escalated as President Donald Trump reiterated that the U.S has “total control” over the Strait of Hormuz, However, Iran’s top security official said the waterway would remain closed unless Washington accepted Tehran’s conditions leading to U.S forces disabling a Panama-flagged cargo ship bound for an Iranian port. President Trump rejected Iran’s demands for sanctions relief and compensation, instead calling for Tehran to compensate those affected by wars, attacks and protests. The renewed standoff has complicated efforts to reopen the Strait of Hormuz, while attacks on regional energy infrastructure and shipping have kept concerns over oil supply disruptions elevated.

The proposed discussions aim to address the reopening of the Strait of Hormuz and Iran's nuclear program. The Strait, through which nearly 20% of global oil and LNG shipments pass, has remained largely disrupted during the conflict, contributing to elevated energy prices and broader inflationary pressures. Consequently, while the upcoming U.S–Iran talks have improved near-term market sentiment, the absence of a defined timeline and the fragile security environment suggest that geopolitical risk premiums are likely to remain elevated until tangible progress is achieved.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.6%.

Base metals:

• Copper prices are up 1.5% on a weekly basis, as weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and elevated global inventories.
• Aluminum prices are up 2.4% on a weekly basis due to geopolitical tensions and inventory drawdown despite subdued demand.

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 signaled it could maintain its naval blockade of Iran indefinitely while intensifying economic sanctions, as stalled ceasefire talks, renewed attacks in the Strait of Hormuz, and escalating regional tensions continue to threaten global oil supplies.
• The IEA now expects global oil supply to decline by 4.3 MBpd in 2026 to 102.02 MBpd, creating a 1.27 MBpd supply deficit, as renewed Middle East disruptions and the Strait of Hormuz shutdown continue to constrain global flows.
• The agency also projects a 1.8 MBpd market deficit during Jul'26 – Sep'26, while lowering its 2026 oil demand outlook to a 1.6 MBpd contraction, with global refinery throughput falling 5 MBpd YoY in Jul'26.
• India's dependence on Russian crude reached a record 50.83% of total imports in Jul'26, equivalent to 2.47 MBpd, up by 62.4% YoY, despite a 4.8% decline from Jun'26 record 2.6 MBpd.
• Russia's share of India's crude imports averaged 43.25% during Apr'26–Jul'26, while the Middle East's share fell from 43% to 30%, and Latin America's share increased from 3.5% to 12.7%, highlighting a significant shift in India's sourcing strategy amid Middle East supply disruptions.
• Meanwhile, global refinery crude processing fell by 5 MBpd YoY in Jul'26, pushing refining margins to record highs as supply bottlenecks persisted.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.

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:

U.S-Iran tensions escalated as President Donald Trump reiterated that the U.S has “total control” over the Strait of Hormuz, However, Iran’s top security official said the waterway would remain closed unless Washington accepted Tehran’s conditions leading to U.S forces disabling a Panama-flagged cargo ship bound for an Iranian port. President Trump rejected Iran’s demands for sanctions relief and compensation, instead calling for Tehran to compensate those affected by wars, attacks and protests. The renewed standoff has complicated efforts to reopen the Strait of Hormuz, while attacks on regional energy infrastructure and shipping have kept concerns over oil supply disruptions elevated.

The proposed discussions aim to address the reopening of the Strait of Hormuz and Iran's nuclear program. The Strait, through which nearly 20% of global oil and LNG shipments pass, has remained largely disrupted during the conflict, contributing to elevated energy prices and broader inflationary pressures. Consequently, while the upcoming U.S–Iran talks have improved near-term market sentiment, the absence of a defined timeline and the fragile security environment suggest that geopolitical risk premiums are likely to remain elevated until tangible progress is achieved.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.6%.

Base metals:

• Copper prices are up 1.5% on a weekly basis, as weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and elevated global inventories.
• Aluminum prices are up 2.4% on a weekly basis due to geopolitical tensions and inventory drawdown despite subdued demand.

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 IEA now expects global oil supply to decline by 4.3 MBpd in 2026 to 102.02 MBpd, creating a 1.27 MBpd supply deficit, as renewed Middle East disruptions and the Strait of Hormuz shutdown continue to constrain global flows.
• The agency also projects a 1.8 MBpd market deficit during Jul'26 – Sep'26, while lowering its 2026 oil demand outlook to a 1.6 MBpd contraction, with global refinery throughput falling 5 MBpd YoY in Jul'26.
• Meanwhile, global refinery crude processing fell by 5 MBpd YoY in Jul'26, pushing refining margins to record highs as supply bottlenecks persisted.
• Saudi crude exports from the Red Sea are increasingly being shipped via "dark" voyages to evade Houthi attacks, with around 70% of west coast loadings operating without AIS tracking, Bab al-Mandeb vessel traffic falling to 32 ships/day from 50, and Sidi Kerir crude loadings reaching a record 2.17 Mbpd, up 50% WoW.
• Ukraine has reportedly paused drone attacks on oil tankers near Russia's Black Sea port of Novorossiysk following a request from US Vice President JD Vance, after Washington raised concerns over disruptions to CPC crude exports and global oil markets.
• Yemen’s internationally recognised government on Tuesday accused the Iran-backed Houthis of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb Strait, the strategic waterway separating the Arabian Peninsula from the Horn of Africa.
• Iran stated that the US must lift sanctions on Tehran and meet several other conditions before the Strait of Hormuz can be reopened.
• Industry data indicated that US crude oil inventories increased by 9.1 million barrels last week, recording their biggest weekly build since Feb'26.
• The US Energy Information Administration (EIA) said some Middle Eastern producers may struggle to restore oil output to pre-conflict levels by the end of 2027, even if trade flows normalize by early next year. Around 5.5 million bpd of Middle Eastern oil production was reportedly shut in during July.

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:

U.S-Iran tensions escalated as President Donald Trump reiterated that the U.S has “total control” over the Strait of Hormuz, However, Iran’s top security official said the waterway would remain closed unless Washington accepted Tehran’s conditions leading to U.S forces disabling a Panama-flagged cargo ship bound for an Iranian port. President Trump rejected Iran’s demands for sanctions relief and compensation, instead calling for Tehran to compensate those affected by wars, attacks and protests. The renewed standoff has complicated efforts to reopen the Strait of Hormuz, while attacks on regional energy infrastructure and shipping have kept concerns over oil supply disruptions elevated.

The proposed discussions aim to address the reopening of the Strait of Hormuz and Iran's nuclear program. The Strait, through which nearly 20% of global oil and LNG shipments pass, has remained largely disrupted during the conflict, contributing to elevated energy prices and broader inflationary pressures. Consequently, while the upcoming U.S–Iran talks have improved near-term market sentiment, the absence of a defined timeline and the fragile security environment suggest that geopolitical risk premiums are likely to remain elevated until tangible progress is achieved.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.6%.

Base metals:

• Copper prices are up 1.5% on a weekly basis, as weaker job data and softer CPI shifts Fed hike expectations lower, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty and elevated global inventories.
• Aluminum prices are up 2.4% on a weekly basis due to geopolitical tensions and inventory drawdown despite subdued demand.

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

• Yemen’s internationally recognised government on Tuesday accused the Iran-backed Houthis of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb Strait, the strategic waterway separating the Arabian Peninsula from the Horn of Africa.
• Iran stated that the US must lift sanctions on Tehran and meet several other conditions before the Strait of Hormuz can be reopened.
• Industry data indicated that US crude oil inventories increased by 9.1 million barrels last week, recording their biggest weekly build since Feb'26.
• The US Energy Information Administration (EIA) said some Middle Eastern producers may struggle to restore oil output to pre-conflict levels by the end of 2027, even if trade flows normalize by early next year. Around 5.5 million bpd of Middle Eastern oil production was reportedly shut in during July.
• President Donald Trump said on Tuesday that the U.S. could either allow Iran’s economy to deteriorate under continued pressure or launch a major military strike, as tensions remain high. His remarks came amid stalled US-Iran negotiations and continued disruption around the Strait of Hormuz, raising concerns over further escalation and global oil supplies.
• President Donald Trump has extended the Jones Act waiver for 90 days to allow foreign-flagged vessels to transport energy products between US ports, while introducing case-by-case approval requirements to balance fuel supply needs with protection of the domestic maritime industry.
• India's oil demand increased by 2.9% YoY to 19.92 million metric tons in July, supported by strong growth in diesel and gasoline consumption. Diesel and gasoline demand rose 10.0% and 9.2% respectively, while LPG, naphtha and petroleum coke consumption declined during the month.
• Angola is facing a fuel shortage due to rising domestic demand, higher global fuel prices and supply constraints, leading to long queues at fuel stations.The government is working to ease the crisis, while costly fuel subsidies continue to strain state-owned Sonangol's finances.

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:

Prospects for a peace deal weakened as President Trump rejected Iran’s demands for sanctions relief and compensation, instead calling for Tehran to compensate those affected by wars, attacks and protests. The renewed standoff has complicated efforts to reopen the Strait of Hormuz, while attacks on regional energy infrastructure and shipping have kept concerns over oil supply disruptions elevated.

The proposed discussions aim to address the reopening of the Strait of Hormuz and Iran's nuclear program. The Strait, through which nearly 20% of global oil and LNG shipments pass, has remained largely disrupted during the conflict, contributing to elevated energy prices and broader inflationary pressures. Consequently, while the upcoming U.S–Iran talks have improved near-term market sentiment, the absence of a defined timeline and the fragile security environment suggest that geopolitical risk premiums are likely to remain elevated until tangible progress is achieved.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.6%.

Base metals:

• Copper prices are up 2.5% on a weekly basis, as Fed holds interest rates, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, high China copper premium, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty, hawkish Fed outlook, and elevated global inventories.
• Aluminum prices are up 2.1% on a weekly basis due to renewed tensions.

Precious metals:

• Stronger U.S. yields and weak industrial offtake, especially auto are suppressing any upside momentum.
• Stronger US Dollar due to anticipation of rate hike in US is 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

• Iran stated that the U.S. must lift sanctions on Tehran and meet several other conditions before the Strait of Hormuz can be reopened, while President Donald Trump insisted that Iran must pay compensation for those killed and seriously injured.
• The US and European diesel prices surged on 10th Jul'26 after attacks on refineries in Russia and Saudi Arabia intensified global supply concerns, with the US ultra-low sulfur diesel futures jumping 7.4% to 4.19 USD/gallon and European diesel refining margins rising nearly 10%.
• The rally comes amid historically tight supplies, with the US distillate inventories at 107.2 mln bbl, the lowest seasonal level in 30 years and market grapevine expecting a further 1.6 mln bbl draw last week.
• Houthi rebels attacked Saudi Aramco's Jazan refinery with drones, causing a fire that was later extinguished without injuries, while also targeting Yemen's Mocha port, escalating tensions in the Red Sea.
• The attacks come amid ongoing uncertainty over US–Iran peace talks and access to the Strait of Hormuz, increasing concerns over disruptions to global oil supplies and regional security.
• President Donald Trump has extended the Jones Act waiver for 90 days to allow foreign-flagged vessels to transport energy products between US ports, while introducing case-by-case approval requirements to balance fuel supply needs with protection of the domestic maritime industry.
• The US crude imports increased to 6.2 MBpd, while exports reached 3.7 MBpd. At the same time, gasoline and distillate stocks declined, indicating relatively tighter fuel inventories.
• India's oil demand increased by 2.9% YoY to 19.92 million metric tons in July, supported by strong growth in diesel and gasoline consumption. Diesel and gasoline demand rose 10.0% and 9.2% respectively, while LPG, naphtha and petroleum coke consumption declined during the month.
• Angola is facing a fuel shortage due to rising domestic demand, higher global fuel prices and supply constraints, leading to long queues at fuel stations.The government is working to ease the crisis, while costly fuel subsidies continue to strain state-owned Sonangol's finances.

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:

Prospects for a peace deal weakened as President Trump rejected Iran’s demands for sanctions relief and compensation, instead calling for Tehran to compensate those affected by wars, attacks and protests. The renewed standoff has complicated efforts to reopen the Strait of Hormuz, while attacks on regional energy infrastructure and shipping have kept concerns over oil supply disruptions elevated.

The proposed discussions aim to address the reopening of the Strait of Hormuz and Iran's nuclear program. The Strait, through which nearly 20% of global oil and LNG shipments pass, has remained largely disrupted during the conflict, contributing to elevated energy prices and broader inflationary pressures. Consequently, while the upcoming U.S–Iran talks have improved near-term market sentiment, the absence of a defined timeline and the fragile security environment suggest that geopolitical risk premiums are likely to remain elevated until tangible progress is achieved.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.6%.

Base metals:

• Copper prices are up 2.5% on a weekly basis, as Fed holds interest rates, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, high China copper premium, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty, hawkish Fed outlook, and elevated global inventories.
• Aluminum prices are up 2.1% on a weekly basis due to renewed tensions.

Precious metals:

• Stronger U.S. yields and weak industrial offtake, especially auto are suppressing any upside momentum.
• Stronger US Dollar due to anticipation of rate hike in US is 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

• Houthi rebels attacked Saudi Aramco's Jazan refinery with drones, causing a fire that was later extinguished without injuries, while also targeting Yemen's Mocha port, escalating tensions in the Red Sea.
• The attacks come amid ongoing uncertainty over US–Iran peace talks and access to the Strait of Hormuz, increasing concerns over disruptions to global oil supplies and regional security.
• The UAE accused Iran of attacking an ADNOC-linked oil tanker in the Strait of Hormuz, calling it an act of piracy that has further disrupted global oil shipping and heightened concerns over energy security in the region.
• ADNOC said repeated missile and drone attacks on its vessels in the Strait of Hormuz have disrupted its operations, highlighting growing risks to global oil shipping and the importance of ensuring safe navigation through the strategic waterway.
• Iran and Oman reported further progress in talks on a temporary shipping route through the Strait of Hormuz, although no final agreement has been reached .
• Petrobras reported record Q2 2026 results, with Brazil's crude production rising 15% YoY to 2.7 MBpd and total oil and gas output reaching a record 3.34 MBpd.
• Saudi Aramco lowered its September crude prices for most buyers, especially in Asia, after weaker oil market conditions in July.The company also asked Asian customers to prepare alternative loading plans outside the Strait of Hormuz in case shipping disruptions continue, although available volumes are limited.
• US crude imports increased to 6.2 MBpd, while exports reached 3.7 MBpd. At the same time, gasoline and distillate stocks declined, indicating relatively tighter fuel inventories.
• India's oil demand increased by 2.9% YoY to 19.92 million metric tons in July, supported by strong growth in diesel and gasoline consumption. Diesel and gasoline demand rose 10.0% and 9.2% respectively, while LPG, naphtha and petroleum coke consumption declined during the month.
• Angola is facing a fuel shortage due to rising domestic demand, higher global fuel prices and supply constraints, leading to long queues at fuel stations.The government is working to ease the crisis, while costly fuel subsidies continue to strain state-owned Sonangol's finances.

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 President Donald Trump says ongoing negotiations are Iran's "last chance" for a deal to end the conflict, after he called off a planned major military strike. Meanwhile, Tehran publicly denies direct talks with Washington, stating it is only discussing a temporary safe shipping route through the Strait of Hormuz with Oman.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.1%.

Base metals:

• Copper prices are up 4.8% on a weekly basis, as Fed holds interest rates, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, high China copper premium, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty, hawkish Fed outlook, and elevated global inventories.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions.

Precious metals:

• Stronger U.S. yields and weak industrial offtake, especially auto are suppressing any upside momentum.
• Stronger US Dollar due to anticipation of rate hike in US is 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

• Iran and Oman reported progress on a temporary shipping route through the Strait of Hormuz, although this would not mean a full reopening of the Strait.
• Vessel traffic remains low as key details are still under discussion. Meanwhile, Houthi forces claimed an attack on a Saudi tanker near Yanbu and threatened further attacks in the Red Sea and Gulf of Aden, keeping shipping risks high.
• OPEC+ is set to increase production by around 188,000 b/d, while geopolitical tensions around Hormuz and the Red Sea continue to drive crude supply and trade flows.
• The US crude inventories rose by 2.5 mln bbl to 407 mln bbl for the week ending 31st July, against expectations of a decline, adding some downward pressure on crude prices. Meanwhile, SPR stocks fell by 2.8 mln bbl to 304.8 mln bbl, keeping emergency reserves at low levels. Refinery activity remained strong at 96.5%, although crude processing declined slightly to 17.2 MBpd.
• The US crude imports increased to 6.2 MBpd, while exports reached 3.7 MBpd. At the same time, gasoline and distillate stocks declined, indicating relatively tighter fuel inventories.

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 President Donald Trump says ongoing negotiations are Iran's "last chance" for a deal to end the conflict, after he called off a planned major military strike. Meanwhile, Tehran publicly denies direct talks with Washington, stating it is only discussing a temporary safe shipping route through the Strait of Hormuz with Oman.

Steel:

• Domestic steel prices have moderated from recent highs.
• Steel supply chains remain largely insulated from the Middle East conflict.
• Since, the start of war steel HRC prices are up by 7.1%.

Base metals:

• Copper prices are up 4.8% on a weekly basis, as Fed holds interest rates, market remains in backwardation structure, and inflation pressures ease amid ceasefire. Prices receive continued support from CME-LME arbitrage, high China copper premium, exchange inventory outflows, and persistent mine supply constraints which offset pressure from geopolitical uncertainty, hawkish Fed outlook, and elevated global inventories.
• Aluminum prices are up 0.9% on a weekly basis due to renewed tensions.

Precious metals:

• Stronger U.S. yields and weak industrial offtake, especially auto are suppressing any upside momentum.
• Stronger US Dollar due to anticipation of rate hike in US is 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.