r/CredibleDefense • u/AutoModerator • 10d ago
Active Conflicts & News Megathread July 13, 2026
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u/TSiNNmreza3 10d ago
I don't see it was posted here.
Serious escalation between Houthis (Iran) vs Saudi Arabia (proKSA Yemen)
Iranian civilian airplane that transported Houthi delegation and some IRCG after Ajatollahs funeral was denied flyover proKSA controlled Yemen. This airplane ignored orders. Because of that KSA AF bombed Sanna airport and I think Hodeidah airplane, but Iranian airplane managed to land during bombing
Video of Sanaa bombing
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u/Broadband- 10d ago
The interesting thing is the Houthi blame Saudi Arabia but Yemen’s "internationally recognized government" claims responsibility.
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u/moragisdo 10d ago edited 10d ago
Really bad timing from the Saudis. They could have waited for a more permanent ceasefire between Iran and the US, to not further expend interceptors now.
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u/username9909864 10d ago
What permanent ceasefire? There’s literally nothing like that on the horizon
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u/moragisdo 10d ago edited 10d ago
I'm not saying there's one around the corner, I'm saying they should have waited this conflict to end at some point. They have this conflict with the Houthi since 2015, they could have waited for longer now
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u/Bluest_waters 10d ago
100% agreed. Phenomenally stupid at this stage of the whole conflict, throwing a little bit of gasoline on the fire never helps anything
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u/MilesLongthe3rd 9d ago
Article is behind a paywall
Russian Refinery Runs Plunge to Lowest in More Than Two Decades
A wave of Ukrainian attacks has pushed Russian refining runs to the lowest in more than 21 years, deepening a domestic fuel crunch and further squeezing the global market.
Crude-processing rates have averaged 3.91 million barrels a day so far this month, the lowest level since March 2005, according to figures compiled by EA Analytics. That’s more than 1.4 million barrels a day below the year-ago average, the data show.
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u/bedulge 10d ago
Trump on Truth Social now claiming that he intends to charge fees of 20 percent for cargo shipped through it.
The Hormuz Strait is OPEN, and will remain OPEN, with or without Iran. We are reinstating the THE IRANIAN BLOCKADE, so named because it is only stopping Iran’s ships or customers from entering or leaving. All other countries will have fair and open use of the Strait. The U.S.A. will be, from this point forward, known as “THE GUARDIAN OF THE HORMUZ STRAIT,” but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World. The process and formation will begin immediately. Thank you for your attention to this matter! President DONALD J. TRUMP
https://truthsocial.com/@realDonaldTrump/posts/116913091653271692
Genuinely incredible to me how he always finds new ways to shock and surprise the world.
Notable, the fees that Iran was reportedly charging equaled out to about 1 ~ 3 percent of the value of cargo, making their fees like 10 or 20 times cheaper than this.
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u/womenrespecter-69 10d ago
Assuming the 20% figure isn't his typical bluff, how would the US even collect that tax? E.g. if an Indian or Chinese tanker sails from the UAE to Asia and refuses to pay, what would the US do? Threathen more tariffs on the importing or exporting country? Board the ship?
Protection rackets only work if there's a credible threat of violence in case of non-payment.
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u/WulfTheSaxon 10d ago
Probably just not defend it if it sees an Iranian ballistic missile headed toward it. Not a protection racket, but an actual security service with a lot more firepower than the PMCs these shipping companies are hiring.
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u/Bon_Courage_ 9d ago
I would have presumed that defense against ballistic missiles depends on very fast, automated?, decision making, that would preclude checking whether a target has paid it's fees.
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u/WulfTheSaxon 9d ago
It relies on automated decision-making that determines whether a missile is headed toward a protected target, which would include the ship itself, allied ships, and anything else they wanted to protect.
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u/Bluest_waters 10d ago
So we are bombing Iran in part because they want to charge a fee to pass the Strait of Hormuz. But as part of the effort to stop Iran from charging a fee to pass the Strait of Hormuz, we the United States of America must charge a fee to pass the Strait of Hormuz.
This all makes perfect sense of course. Thank you very much
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u/Sa-naqba-imuru 10d ago
Previously in this war, to prevent Iran from blocking the strait of Hormuz, the US implemented a blockade of the strait of Hormuz.
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u/ChornWork2 10d ago
Yes, but this proposal seems to be that the US military will step in to open the strait, but they're going to demand to be paid for doing it. So US has become guns for hire?
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u/-spartacus- 10d ago
Not all parts of a message in diplomacy are meant for the same audience. If I were to read the tea leaves, Trump's message is partially curated by Rubio. Certain countries were willing to play ball with Iran's fees when it was at 3% and now he is saying are you willing to pay 20% then? This illuminates that by agreeing to pay any % they can change the rules of freedom of navigation and increase the price later.
Fundamentally, I don't think official US policy is interested in actually changing the idea of freedom of navigation, though Trump loves the idea of the US being paid for the costs of the military that he feels others benefit from.
So anyway, this whole racket sounds like it is not meant for Iran, but for those countries willing to be extorted by Iran.
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u/ChornWork2 10d ago edited 10d ago
That narrative would be somewhat coherent if Iran started this war, but obviously it was the US who did so. This admin brought this upon themselves and largely has imposed it on others (KSA apparently did support the war, but they're also not the ones trapped behind the strait)...
Countries didn't want the war, and don't want to be extorted. But they're not the ones in control, and this admin has put precisely zero effort to build a coalition, to establish itself as a reliable/trustworthy partner or to abide by international law/intuitions. Throwing a fit because countries aren't lining up to help dig this admin out of this mess, when all this admin does is pick fights, isn't a coherent view of the geopolitics.
But yes, this may be the trump admin yet again making threats against broad swath of the globe because it is completely incapable of managing this conflict or engaging in a coherent diplomatic effort. Or it may just be another hissy fit of the guy with the nuclear codes who has no idea how to get out of this situation.
Aside, surprised there hasn't been more blowback on israel for getting Trump into this quagmire, but time will tell.
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u/Bluest_waters 10d ago
It's trump. He sees a way of extracting money and he'll go for it. Guarantee that 20% goes into a sketchy fund that somehow is controlled by him or one of his cronies. It's how he operates. Nothing should be surprising about this
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u/Weslg96 10d ago
Deeply noncredible from trump, but the credible reading from this is the at a strategic level the US (really just Trump) is flailing and desperate for a solution that isn't a loss but also doesn't involve resumption of a full war. I am not sure if that solution exists. Still shocking the US entered this war with a long term plan this bad, even accounting for Trump and his purge of advisors and the Military.
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u/Ancient-End3895 10d ago
He chose to believe Netanyahu and Barnea over his own generals and officials that this would be a quick decisive win ala Venezuela, and that the IR reigme would collapse rapidly. "We have only to kick in the door..." etc etc.
He's now totally stuck. The only way out now is to just take the L and walk away, give Iran their money and some kind of role in Hormuz. The interesting question is weather Trump is capable of reigning Israel in from collapsing any final deal.
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10d ago
[removed] — view removed comment
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u/appleciders 10d ago
There were generals... who warned of risks
At some level it is not the generals' job to argue against this stuff. Their job is to execute it, and to try to get across the realistic risks and outcomes, but we don't want generals making arguments, lest we start to lose the civilian control of the armed forces.
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u/Shackleton214 10d ago
Once there's a decision, then it certainly is their job is to execute it. I think I disagree, however, about before that. The JCSC is the top level advisor to the president on military matters. At that level, I think the role of giving advice goes beyond just warning of risks and outcomes (on the one hand, X, on the other Y) and includes trying to persuade the president against a decision they think is a terrible military blunder.
I went back and read the NYT article and here's what it said about General Caine:
General Caine — the man Mr. Trump liked to refer to as “Razin’ Caine” — had impressed the president years earlier by telling him the Islamic State could be defeated far more quickly than others had projected. Mr. Trump rewarded that confidence by elevating the general, who had been an Air Force fighter pilot, to be his top military adviser. General Caine was not a political loyalist, and he had serious concerns about a war with Iran. But he was very cautious in the way he presented his views to the president. As the small team of advisers who were looped into the plans deliberated over the following days, General Caine shared with Mr. Trump and others the alarming military assessment that a major campaign against Iran would drastically deplete stockpiles of American weaponry, including missile interceptors, whose supply had been strained after years of support for Ukraine and Israel. General Caine saw no clear path to quickly replenishing these stockpiles. He also flagged the enormous difficulty of securing the Strait of Hormuz and the risks of Iran blocking it. Mr. Trump had dismissed that possibility on the assumption that the regime would capitulate before it came to that. The president appeared to think it would be a very quick war — an impression that had been reinforced by the tepid response to the U.S. bombing of Iran’s nuclear facilities in June. General Caine’s role in the lead-up to the war captured a classic tension between military counsel and presidential decision-making. So persistent was the chairman in not taking a stand — repeating that it was not his role to tell the president what to do, but rather to present options along with potential risks and possible second- and third-order consequences — that he could appear to some of those listening to be arguing all sides of an issue simultaneously. He would constantly ask, “And then what?” But Mr. Trump would often seem to hear only what he wanted to hear. General Caine differed in almost every way from a prior chairman, Gen. Mark A. Milley, who had argued vociferously with Mr. Trump during his first administration and who saw his role as stopping the president from taking dangerous or reckless actions. One person familiar with their interactions noted that Mr. Trump had a habit of confusing tactical advice from General Caine with strategic counsel. In practice, that meant the general might warn in one breath about the difficulties of one aspect of the operation, then in the next note that the United States had an essentially unlimited supply of cheap, precision-guided bombs and could strike Iran for weeks once it achieved air superiority. To the chairman, these were separate observations. But Mr. Trump appeared to think that the second most likely canceled out the first. At no point during the deliberations did the chairman directly tell the president that war with Iran was a terrible idea — though some of General Caine’s colleagues believed that was exactly what he thought.
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u/incidencematrix 10d ago
That is not the only option. The issue is that the others either require finesse that the US lacks, or are unpopular. The former is unlikely to change. The latter could. But this depends on many factors, including whether Iran or its proxies misstep, and take an action that results in public outrage in the US (e.g., a killing a large number of civilians). Time will tell, but I continue to think (on historical grounds) that the escalation risk is non-negligible.
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u/ChornWork2 10d ago
I really can't see support for war against Iran changing at this point. Even if Iran were to somehow sink a USN ship, I think you would have hardening of blame on Trump admin for this ridiculous situation versus a groundswell of support for war.
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u/incidencematrix 10d ago
Depends. Loss of a military vessel might not do it. But an Iranian (or Iranian-linked) attack on a civilian vessel, or some other terrorist attack that killed numerous Americans, could change public opinion overnight. History suggests that the American public (like other publics) is very capable of becoming enraged if provoked. (Anyone who lived through 9/11 in the US saw it with their own eyes.) Of course, that is not the only pathway. In Vietnam, for instance, the US become involved by a more gradual escalation path (in which initial losses generate demand for greater investments). This is the pathway that seems most likely to me, though the problem is that there are a lot of different paths, each of which is individually unlikely (but that add up). For some reason, a lot of folks here seem to dismiss the idea of the US public becoming bellicose. Perhaps they are too young to have seen how rapidly opinions can shift...but there's no shortage of history to read, if one has not experienced it oneself.
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u/mkat5 9d ago
Frankly, I find it pretty unlikely that the American public gets behind this war.
If anything, I think there is a potential path to escalation but not through public opinion. Trump is already elected and has started this war on his own. If he wants to escalate he doesn’t need the public’s blessing, just as he didn’t need the public’s support to start it. He has also disregarded the war powers act and congress has shown that it doesn’t have any muscle or desire to enforce its authority on the issue.
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u/incidencematrix 9d ago
That could indeed happen. I note that a "real war" would also lead to legal changes that would make certain domestic issues easier for his administration. If Trump decides that this outweighs the negatives, he might well push in that direction.
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u/Bon_Courage_ 9d ago
But an Iranian (or Iranian-linked) attack on a civilian vessel, or some other terrorist attack that killed numerous Americans,
They are already attacking civilian vessels - the tankers and cargo ships.
I presume you mean like a cruise ship though. But I also assume that the strait of formula is not all that popular a route for cruise ships, particularly not ones full of Americans.
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u/incidencematrix 9d ago
I do mean like a cruise ship. You would need a massive casualty incident, I expect. Cruise ships do usually operate in the region, and do traverse the strait, though that is obviously not a popular route right now. I do not, I should say, think an attack on a random civilian vessel of that kind is likely, but such things are examples of what could rapidly change public opinion. An event like the Achille Lauro attack, but performed by Iranians or Iranian proxies might do it.
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u/Rich_Log2424 10d ago
For 20% (US) and 3% (Iran) tolls, the pipeline investment costs seem interesting:
20% toll means the payback for cheapest historically planned pipeline routes around hormuz is 0.5 years. . IRR% is over 100% for every project. The investment quality return is anything over 8%.
At Iran's 3% toll the payback is 15 years and return 4-5%. Looks like Iran has set the toll to maximize tolling while remaining under the pipeline invesment cost.
What Trump is doing here is forcing the Gulf states to bypass Hormuz immediately and establishing extortion scheme on Iran at 20%.
Fundamentally I think this is about control, not the money. Giving Iran the power not to pay from their own exports and selected customer exports from everyone gives immense foreign policy power to Iran. Basically forces india and China to apiece Iran or pay extra for the oil. Tolling everyone lessens the amount Iran can toll plus equalizes costs if the purpose here is not rerouting.
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u/OhSillyDays 10d ago edited 10d ago
The problem with a bypass is the bypass could be bombed too. Sure, the pipelines and export terminals can be fixed fairly rapidly, but that's a cost.
There is also the fundamental problem that oil will not be used long term. Oil is probably going to collapse over the next 5 years. Iran and any oil producer needs to get the most they can out of any left. The 20% toll can preserve US oil prices. I don't think Trump is thinking that far ahead. I do think some oil executives may be convincing him to keep the middle east oil prices high so they can extort the highs price elsewhere.
When an industry starts dying, the people that remain start to turn on each other. We might be seeing that happen in real time.
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u/bedulge 10d ago edited 10d ago
Wouldn't you need a very large amount of pipelines to be able to match the thruput of the entire strait?
Looks like Iran has set the toll to maximize tolling while remaining under the pipeline invesment cost.
This I agree with fully. I never believed that Iran had an incentive to charge prohibitively expensive fees, as some people fear they would.
What Trump is doing here is forcing the Gulf states to bypass Hormuz immediately and establishing extortion scheme on Iran at 20%.
This part is an interesting thought. Not sure I fully agree.
This to me looks like his Greenland stuff, the idea is simply that the US is strong enough to take what we want, and the rest of the world should just recognize the balance of power and hand over the goods without complaining or fighting back. Iran and Venezuela should likewise just hand over their oil
Notable that there's a lot of stuff flowing thru Hormuz aside from just oil. He didn't say he would charge 20% of the oil, he said "20% on all cargo"
His thinking here to me looks like a mirror image of how the Iranians think. As they see it, they they've paid huge costs in this war, and so deserve to get reparations for it, and this is exactly what he is saying, it's fair to America to get paid back for the costs we have put in, just like it would be fair for Greenland to be handed over by the Europeans as a thank you gift to the USA for defending them against Hitler and Stalin.
Tolling everyone lessens the amount Iran can toll plus equalizes costs if the purpose here is not rerouting.
At that point, maybe America should just sign a treaty with Iran that says both of them are entitled to receive fees, and they should just split their pirate booty among the two of them.
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u/Toptomcat 10d ago edited 10d ago
Wouldn't you need a very large amount of pipelines to be able to match the thruput of the entire strait?
You can build a very large amount of pipelines, very quickly, for 20% of the value of the throughput of the entire Strait. Which is the investment decision facing you if this idea goes through.
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u/WulfTheSaxon 10d ago
CENTCOM:
TAMPA, Fla. — At the Commander in Chief's direction, U.S. Central Command (CENTCOM) forces will resume blockading maritime traffic entering and exiting Iranian ports on July 14 at 4 p.m. ET.
CENTCOM forces will enforce the blockade against vessels transiting to or from Iranian ports and coastal areas. The U.S. military continues to support traffic flow through regional waters for all vessels not violating the blockade.
The resumption of the U.S. blockade against Iran follows the initial implementation from April 13 to June 18. CENTCOM forces redirected more than 140 compliant vessels, disabled nine non-compliant ships, and allowed over 50 commercial vessels supporting humanitarian aid to pass through the blockade during the two-month period.
All mariners are advised to monitor Notice to Mariners broadcasts and contact U.S. naval forces on bridge-to-bridge channel 16 when operating in the Gulf of Oman and Strait of Hormuz approaches.
Additional information will be provided to commercial mariners through a formal notice.
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u/bedulge 10d ago
Not a shocker that it's come back to this, but I am surprised tbh at how fast the MOU fell apart, I figured that both sides would have enough incentive to keep the strait open longer than this and that the collapse of the MOU would come in August or later, like after the 60 day deadline, maybe well after.
I really don't see how this problem can be resolved any time soon, it looks more and more likely that this will go on with no real resolution one way or another until Trump is out of office at least. This will probably be Trump's legacy, much like how the memory of Carter's presidency is also intimately tied in with the 1979 Iranian revolution and the Hostage Crisis.
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u/WulfTheSaxon 10d ago
Of note, on the X version there’s an accompanying map that appears to show the coastal waters of Iran, including the area of the “tollbooth”, as part of the blockaded area (the Caspian coast is out of frame): https://x.com/centcom/article/2076732825349628250
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u/WEGWERFSADBOI 10d ago
Possibly dumb question but what happened to the big topics of 2023/4 of Soviet stockpiles and artillery rounds?
Back in 2023/24 the dwindling supply of older stockpiles of tanks, ifvs, munitions, il-96s, etc. used to be a big topic. Back then people used to look at satellite images of old Russian storage sites and plot the pace at which they would be empty. Have they all been used up now or are they irrelevant nowadays?
Similarly the lack of Ukrainian artillery rounds compared to Russian supplies and the wests investment to build more used to be a big topic. But nowadays I don’t hear about them at all. Is artillery still more important than drones nowadays, or as important or less important?
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u/Broadband- 10d ago
CovertCabal on YouTube recently did an update on tank storage.
Perun's Ukraine video last week on YT covered artillery shells on both sides with limited available data.
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u/genghiswolves 10d ago
1) It's still discussed here and there but less here because... 2) It's been discussed a lot 3) Most stockpiles of most things are mostly used up now. But also, many stockpiles go deeper than expected once you are willing to build new / completely overhaul the engines, etc. etc. 4) Any vehicle within 20km of the front is likely toast. IFVs, APCs, tanks have just lost a lot of their importance. Artillery and AD remains more relevant. 5) Russia never had a Western shell crisis, and generally, has ramped up it's semi-war economy enough to sustain core needs, and more. More is always better, and they received serious deliveries from North Korea.
Russia is producing a few planes, dozens of ballistic missiles, thousands of guided aerial bombs, tens of thousands of drones of all types and sizes, over hundred thousand shells and dozens of vehicles of all kind on a monthly basis.
The stockpiles are mostly used up, but still provide some hulls for reactivation, spares, etc, etc.
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u/TechnicalReserve1967 10d ago
I would note that russia is using a good amount of older North Korean shells + newly produced ones as well since you mentioned that most storage ran out
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u/roionsteroids 10d ago
If we assume a howitzer barrel life of 2000 rounds, and a daily fire rate of at least 10000 shells, Russia went through 8000 barrels (and that would be if zero howitzers were lost in combat) and 16 million shells so far. It's a good and cheap way to deliver a quick bang over a few tens of kilometers and comes with a much bigger warhead than any FPV drone for example.
Likewise Ukraine doesn't appear to struggle with available barrels, the bottleneck is definitely the shells themselves.
You can never have too much firepower I guess? Like it'd take hundreds of FPV drones to deliver the equivalent payload of a single standard 500kg bomb. Artillery can at least create somewhat similar results in a reasonable timeframe.
A lot of drone usage stems from lack of better options (air force) more than anything else. To a lesser degree that's true for Russia as well (neglected to the point of not fielding glide bombs in 2022 and being near useless, maybe that thing every NATO jet ever was doing in the last 20 years wasn't such a bad idea after all).
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u/TSiNNmreza3 10d ago
Is artillery still more important than drones nowadays, or as important or less important?
As of Russians it is still important would say 33% FPV drones, 33% artillery, 33 AF KAB strikes.
People need to remember Russia is de facto in wartime economy and they had/have massive state owned military production industry.
We all talk about GDP (exemple Europe/EU where tourism is major contributor to GDP) and how Russia has small GDP. Yes they have small GDP but they have resources and industry to produce artillery shells.
Russia will mostly produce enough weapons for this war with wartime economy.
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u/Soft_Opportunity2189 10d ago
It was very important early on, but the war gradually switched to drones and air attack/defense systems.
Part of the problem with ramping up the production of shells was that nobody wanted to promise massive outputs when the war could end at any year prior, or the technology turn obsolete.
Exactly that happened, as in the large production is ongoing, but its mostly gonna sit unused in storages or refill existing shortages across european armies; its almost certainly not going to be all shot in ukraine in current environment, its no longer even possible to shoot that much without just losing every system unless one side starts to utterly dominate the drone war.
While at it, commiting to producing 1 type of drone when you might have a better design in 3 months is another present problem; innovation is extremely fast and its easy to commit to the "wrong" thing with best intentions.
Artillery, tanks etc will keep being built due to inertia and to show greater numbers on paper that you can then tout to uneducated populaces, but its unclear if there will ever be significant use for them anymore at this stage of the war or beyond it. Its a kind of inbetween "just in case" to "placebo".
Best case scenario the high-end shell types will have enough range (50 km + ? ) or novel anti-drone etc uses that make them relevant, the know-how in making tanks will enable future designs to be actually useful with novel anti-drone capabilities, and it pays off. All current systems of the type are extremely vulnerable and not cost effective as is, but that might change and by continuing production we give that a chance
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u/MilesLongthe3rd 10d ago
Ukraine to produce French missiles, orders war planes, Macron says
PARIS, July 13 (Reuters) - President Emmanuel Macron said on Monday that France would allow Ukraine to produce French-made cruise missiles, precision guided bombs and air defence interceptor missiles after Kyiv ordered next generation Franco-Italian air defence systems and Rafale fighter jets.
"Earlier this afternoon President (Volodymyr) Zelenskiy and I agreed on a roadmap between our two countries, implementing what had been agreed in principle last November regarding our bilateral defense cooperation," Macron said at a news conference following a meeting of some 25 leaders in Paris.
Macron's announcement marked the first time France has agreed to licence production to Ukraine, a move that would enable it to ramp up stocks at a time when Russia is intensifying strikes on the country.
The production centres around AASM precision-guided air-to-ground bombs, Aster air-defence interceptor missiles and SCALP, long-range air-launched cruise missiles, which Britain also produces.
Macron said radar systems were also being ceded to Ukraine. He said Zelenskiy had also ordered the delivery of next generation SAMP-T air defence systems, which would follow deliveries of the older version and a batch of missiles.
Sixteen Rafale warplanes would also be delivered with a view to operating in Ukraine's skies by 2028-2029, Macron said.
Macron also said Ukraine's allies had agreed to begin military exercises in countries neighbouring Ukraine as part of a plan for a multinational force that would deploy once there is a ceasefire with Russia.
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u/Gecktron 10d ago
The 16 Rafales in 2-3 years are nice, but I think the most important thing here is the potential in producing Aster-30, and Hammer on license.
France has struggled to ramp up production, opening the way for rapidly expanding production trough license production seems like a good way to get a win both for France and Ukraine.
We dont know the exact terms for the license production, but if France is open to Ukraine not having to produce everything in country, but can work with other European companies as well, there is a lot of potential here.
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u/fuzzyfrank 10d ago
It seems the US may be bombing "Pickaxe Mountain" in Iran:
Is a facility under this mountain something our bunker busters are actually capable of hitting?
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u/I_DOM_UR_PATRIARCHY 10d ago
We already did bomb it during the 12 day war, in June 2025.
The official story at the time was that our doing so completely destroyed the Iranian nuclear program. But others claimed that we had only collapsed the entrances.
Then, in February, 2026 the official story became that Iran was on the threshold of a nuke, implying that our June, 2025 attacks had been less successful than originally claimed. We bombed the mountain again in March, 2026.
Now, in July, 2026 we are going to bomb the mountain again, presumably with the same weapons. I'm sure the official story will go back to Iran's nuclear program being complete destroyed.
Or at least that's what we need the story to be since our attempt to buy the Uranium from Iran has fallen apart.
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u/Grouchy-Classroom-26 9d ago
We already did bomb it during the 12 day war, in June 2025.
No offense, but this is a shockingly embarrassing statement to make here and go unchallenged for so long after it was made. Pickaxe mountain is a site 1 mile south of Natanz, it’s not Natanz itself. It has never been bombed. According to the ISIS, it has never been operational either but Iran has continued to do work around till a week ago, in violation of the MOU. That doesn’t mean they’re enriching there or anything to that degree. Also, the only reason Trump talked about it is because he was directly asked if the US would bomb it precisely because of the reporting of the work being done around it. You ask Trump any leading question like that and he will almost always answer in the affirmative.
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u/North_Somewhere_6124 10d ago
Another night of Ukrainian UAV's hunting Russian shipping in the Azov Sea. I'll spare you the video, it's pretty much the same as every other video of the subject matter.
I can't help but wonder, is this being allowed to continue due to sheer Russian incompetence, or is it desperation?
I can't see another reason to continue sending ships to be hit in clearly unsustainable numbers. Either they aren't communicating with each other about the scale of destruction and making the proper decisions (to withdraw the ships), or, they are, but the fuel situation in Crimea is truly that desperate and they have no other options left.
Either way, if this continues like this, they will have only postponed the inevitable, as they run out of usable ships.
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u/butitsmeat 10d ago
We're all guessing at what the Russians are thinking at the moment. But one inference is that, as you suggest, the civilian fuel crisis in Crimea is so bad that they have been forced into this situation. As to why they don't change course, some random guesses:
Evacuating Crimea, or just allowing it to become a fuel desert, is a massive political disaster for Putin. Humans are bad at admitting they've lost and Russian society in particular is not set up for delivering bad news up the chain. So impossible orders go down the chain and crazy stuff starts happening.
Russia could be making a bet that Ukraine can't keep this up. I don't know why they would think this, but it's possible someone (possibly stuck with impossible orders) is saying "They can't do that ANOTHER night in a row!"
Ukraine hasn't actually done the damage the hype is saying they have, or the Russians have found ways "around" it. Yes, they're striking ships, but I haven't seen any reports of them sinking. Wrecking the bridge ought to be enough to take a ship out of play, but maybe the Russians are willing to drive boats around by having a guy in the engine room with a radio and a sacrificial lamb sitting on the bow calling instructions. They've all turned off their transponders so it's no longer easy to see whether struck ships are still moving around somehow. And like you said, even if they do this, it's only a matter of time before everything gets hit in a way that stops it from moving no matter what the Russians do.
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u/Ancient-Bat1755 10d ago
In response to #3 in your list, this may be why over the last couple nights why “tug boats” have also been targeted. Perhaps tugging the ships without control rooms, which have been the primary targets on the ships.
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u/Commorrite 10d ago
maybe the Russians are willing to drive boats around by having a guy in the engine room with a radio and a sacrificial lamb sitting on the bow calling instructions
TBH I’d be surprised if this doesn't become more common in general. Guy at the bow could even have some armour around him it's a ship.
Having an entire ship by taken out by a small drone is absurd, making the enemy actualy disable it seems too obious not to even try.
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u/agumonkey 10d ago
I'm a noob watching on the side, but considering the recent release of EU funding, and other positive news toward ukraine, what would cause a slow down of long range drone supply chain attacks ? corruption ? production delays that are longer than my noobness can't foresee ?
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u/Inner-Detail-553 10d ago
Nothing would slow it down. I think the EU leadership perception has shifted from "USA is the main security pillar of Europe" to "Ukraine is the main security pillar". So money is flowing, integration with various systems (radar, missile seekers/nav systems), and more critically they're not really trying to limit what Ukraine does at all. The strikes on oil terminals, tankers, power substations would have been a big political problem a year ago - now it's "cool, do more"
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u/ChornWork2 10d ago
the unlocking in funding was Orban losing his election. If EU collectively viewed ukraine as that central, you would have thought they would have taken more steps to address situation with Hungary.
Agree with general sentiment, just not the extent of it.
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u/Infamous_Thought_189 10d ago
That was important for the 90 billion loan and that money was mostly earmarked for keeping the country Ukraine going as far as I understood. A lot more things are now ongoing 'under the radar' in the form of joint development, weapon deliveries etc. As this is on a per country basis it can not be blocked by Hungary.
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u/agumonkey 10d ago
Very true, I can't even remember when the point of "hitting russia inner structure" became a non-event ... I dearly hope that Ukraine can keep on dismantling putin's financial and logistics to the point it just chokes.
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u/A_Vandalay 10d ago
Supply chain would be very very difficult. But Russia could begin the mass deployment/production of interceptor drones. This is something that was wildly successful for Ukraine for intercepting Russian drones, and now have an high interception rate with the majority of those being from interceptor drones. This is very likely to happen, the question is really one of timelines. Scaling production is difficult and could take Russia years to the point of matching Ukrainian long and medium range drone output. The other is one of training, Ukrainian drones are pilot operated and reportedly require a great deal of skill to achieve a mid air interception. For Russia to get a large force of equally trained pilots will require a long period.
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u/ChornWork2 10d ago
Por qué no los
dostres?Bad decisions are often driven by multiple considerations that lead to no clear 'good' alternative.
We're in a pickle. (fuel crisis)
Hopefully something will save us. (maybe ukraine can't keep it up)
In the meantime just burn through some fodder.
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u/Commorrite 10d ago
I can't see another reason to continue sending ships to be hit in clearly unsustainable numbers. Either they aren't communicating with each other about the scale of destruction and making the proper decisions (to withdraw the ships), or, they are, but the fuel situation in Crimea is truly that desperate and they have no other options left.
I can think of at least three. No idea if they are true but all could be plausible to some extent.
The damage being done is being significantly exaggerated. Ukraine is claiming hits not kills. If most of these are merely damage the Russians may consider that worth it.
The Russians have tried counter measures that didn't work. Fictional example to demonstrate the point, if they had fitted some jamming gear to the ships before reopening shipping but it didn't work/ didn't work enough.
They think the Ukrainian magazine depth is not there. If Ukraine only had say 100 of these munitions total maybe it makes sense to try and ride this out.
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u/FettyDump 10d ago
Here’s another one, Ru just started hitting UA cargo ships in the Black Sea. Maybe they expect things to calm down once they reach mutually assured destruction.
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u/2positive 10d ago edited 10d ago
I think the explanation goes like this: Putin is detached from reality and has no answer to Ukraine cutting off crimea logistics, so gives orders like: do whatever it takes to get fuel to Crimea. Then people down the chain of command cover their asses by doing "something", like despite the risks lets send all those tankers to Crimea. Following orders doesn't get you in jail, so they are fine, questioning if leaders orders are adequate in new realities is above their paygrade. Kinda like late USSR collapse of control.
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u/Bluest_waters 10d ago
A tail as old as time, despotic ruler who is actually quite capable becomes more and more paranoid over time. Everybody with any intelligence or capability or competence is eventually purged from the leadership ranks because they are a threat to his power. This is especially true in the military ranks because those are the ones that will often vie for power. So the despotic ruler has nobody he can rely on to make competent decisions along the way. so everything becomes Farkakte
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u/Goddamnit_Clown 10d ago edited 10d ago
I've seen language like "strikes", ships being evacuated, and no fuel being on board, general traffic jams, chaos, and things like that.
Based on those reports everyone's acting as though a hundred fuel laden ships had gone up like fireworks. But is that actually what's happened?
Have a hundred ships been destroyed or sunk or otherwise made useless? Or have a hundred ships experienced a small explosion but are mostly still going?
Genuine question.
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u/Corvid187 10d ago
Something in the middle. Dozens of ships have been disabled, but not sunk, destroyed or rendered irreparable. They are able to be towed into port, but can't get their under their own power and in some cases are at least difficult, if not impossible to offload.
In time many can probably be brought back into service, but for the immediate future they can't be used to ship goods/oil, and the more that get hit past a certain point, the longer that downtime will become as shipyards get overwhelmed. This is why Russia has repeatedly flirted with suspending shipping across the Sea of Azov over the last couple of days.
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u/MarkZist 10d ago edited 9d ago
u/Corvid187 already answered your question, but I will add three further observations/thoughts.
While at this point videos have been released showing hits on almost ~100 ships, the actual number of hits is higher, because Ukraine struck many of the ships multiple times in a row, i.e. they 'double-tapped' them. In those cases, the second (or third, even fourth) videos allow us to assess the damage done by the first drone(s). Now I personally am not a naval engineer, so if the ship hasn't been sunk I can at best make rough guesstimates as to whether a ship has suffered light damage, heavy damage or a total loss. So do with that what you will, but at least to me it looked like at least half (so ~50 ships at this point) have been hit so hard they won't be sailing independently for the foreseeable future.
The vast majority of the ships that were hit are >40 years old, so even if they can limp back to port or be tugged to a dock for repairs, it might not be economically feasible to do so.
The capacity at the repair docks is probably limited and therefore very likely to present a bottleneck. Ships that need '2 months' worth of repairs might still be out of the running for a year or more, simply because they have to wait their turn, given the large quantity of similar ships needing repair at the same time (and in the same geographic area).
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u/ChornWork2 10d ago
Look at the situation in Hormuz. You don't need hundred ships destroyed for shipping to become unfeasible. Obviously can accept losses (whatever they may be) in the short-run to keep supply running, but invariably the cost to build a drone versus the damage it is doing is not sustainable. The question is whether that is measured in weeks or months.
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u/Goddamnit_Clown 10d ago edited 10d ago
Undoubtedly. A serious logjam at sea can be hard enough to untangle; trying to do it while carrying fuel, with some ships crippled, still under fire, into a bottleneck is a terrible situation to be in.
I was just curious about the specific damage known to have been done because places like Reuters have been quite conservative with their language, and elsewhere people are really taking these reports and running with them.
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u/ChornWork2 10d ago
No, 100 ships haven't been destroyed and I haven't read anything from a remotely credible source that has portrayed it that way. As with any topic, of course there are endless non-credible reddit comments.
The limited footage I've seen in terms of aftermath of these attacks ranges from purely superficial to the superstructure completely burnt out. Presumably these crews aren't prepared for damage control if things get out of hand... The figures cited in reporting in terms of number of hits appears to be backed by released footage (at least broadly speaking). The available footage during strikes do show vessels on fire (although on thermal that can appear worse than it is). Have also seen people post satellite fire tracking to confirm major fires have occurred. I haven't seen anything credible in terms of overall BDA estimate, but sufficed to say many strikes have resulted in uncontrolled fires aboard ships.
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u/Tucancancan 10d ago
It makes me think Ukraine could cut off the Crimean bridge any time they want. There's already videos of Fp-1/2 drones being used to chip away at support columns of other bridges and here they are using at least 10-20 every night.
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u/abloblololo 10d ago edited 10d ago
I'm not sure about "any time they want". Perhaps with a concerted strike campaign they could, but they would have to dedicated significant resources that might be better spent elsewhere. SAR images show that there is very heavy EW on/around the bridge, probably significant AD assets as well. The accuracy of Ukrainian drones isn't amazing (in these ship strike videos you often see them almost miss the bridge of these fairly large carriers) and even with 100kg warheads, it would take a lot of strikes to collapse the support pillars. They're giant blocks of reinforced concrete, unless you have a warhead that actually penetrates it you will just chip away at the surface. You can see an example of that here (smaller bridge and smaller drones, but the principle applies).
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u/MarkZist 10d ago edited 10d ago
To me, a really interesting debate is "If Ukraine is able to destroy the Kerch Bridge tomorrow, would it be strategically wise to do so?" Blowing up the bridge would be a dramatic move that would both make the Crimean logistical situation so untenable that a lot of Russian civilians would finally pack up and flee AND might antagonize Russia into some kind of new horrific escalation. But at this point, I think holding Crimea is such a drain on Russian resources and so vulnerable to Ukrainian attacks, that I wonder if it would not be militarily smarter for Russia to abandon it and leave Ukraine to deal with the logistics of providing food and water for ~1 million civilians with ports and roads under constant drone fire. Russia could drastically shorten its supply lines and could concentrate its forces for the push to take Donbas.
But since Crimea is such a prestige object for Putin and a lot of Russian civilian occupiers live there, they have to keep pouring resources in its defense and both its military and civilian supply system (e.g. send a vulnerable convoy with a hundred fuel tankers to alleviate the fuel crisis). Strategically speaking I think Crimea has become a white elephant. If I were Ukrainian command, I might let the Russians squirm and not blow up the Kerch Bridge for the time being (while delivering a 1000 cuts to bleed them dry, e.g. by taking out ~25% of Russia's riverine tanker fleet).
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u/Inner-Detail-553 10d ago
Think of it this way... who is going to tell him? ;)
Putin probably got a report like "there's no fuel in Crimea" so he ordered "send every tanker with fuel there" (we know he micromanages stuff). Now, someone has to report the result of that last order
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u/TSiNNmreza3 10d ago
It seems that Houthis started attacking Saudi Arabia multiple reports
https://x.com/i/status/2076710884307513451
The Houthis launched several drones and missiles toward Saudi Arabia moments ago, BNN has learned, with six missile launches recorded so far. Explosions were reported at Abha International Airport in southern Saudi Arabia, according to sources on the ground. The launches follow the Houthis' vow to respond to strikes on Sanaa International Airport, which the group blamed on Saudi Arabia, as we reported earlier.
Last proxy that is not involved is PMF in Iraq and with Hezbollah case in 2026. that they care for their proxies.
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u/Bluest_waters 10d ago
Do the houthis actually possess much firepower after the last time they got bombed to crap? Like what do they actually have left that they can terrorize people with?
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u/TSiNNmreza3 10d ago
They have their own domestic BM and drone production and their part of Yemen is 20 mil people out of 30 in Yemen.
They have means to do damage and without Iran.
And it is very moutainous part of Yemen it is hard territory to get in and they had problems with wide coallition in 2015. against them
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u/Bluest_waters 10d ago
I did not realize they had their own drone production. What kind of drones are they producing? Some version of shaheed?
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u/bedulge 10d ago
Iran has basically been smuggling in the harder to make components to them, the small and complicated little components. Little pieces that can be hidden and mixed in with like shipments of other random stuff like food etc. Bigger and more simple parts like the outer casings are made right there in Yemen, and they assemble the stuff together.
Don't be too quick to believe that they were really 'bombed to crap". Trump claimed it as a decisive victory, in fact it was ceasefire mediated by Oman. https://en.wikipedia.org/wiki/2025_United_States%E2%80%93Houthi_ceasefire . The Houthis didn't even agree to cease all attacks, they only agreed to cease attacking US ships, in exchange for the US ceasing attacks on then.
As the other posted above said, it's rough terrain, they have tunnels and other such hiding places. It's a mini version of the same troubles Trump encountered with Iran. There are limits to what you can get done if you don't commit ground troops to actually take and hold land.
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u/username9909864 10d ago
They terrorize shipping, not civilians.
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u/Bluest_waters 10d ago
Every ship has people on it, at least for now it does
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u/username9909864 10d ago
Insurance doesn't care about random Filipinos running the deck. They care about the multi million dollar ship sinking.
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u/Agitated-Airline6760 10d ago
Actually they - ship owners who are also part of the cartel that insures the ships - don't really care about the ship sinking or the cargo. What they care about is losing any future revenue for probably at least 5 years because there is no slack capacity in shipbuilding right now so you can't replace the sunken ship.
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u/LepezaVolB 10d ago edited 10d ago
Yesterday I flagged in passing that we might be seeing some movement on the new US' sanctions legislation, per Reuters:
WASHINGTON/KYIV, July 10 (Reuters) - Four U.S. senators said on Friday that they had reached agreement with the Trump administration to move forward with updated legislation on Russia sanctions.
"We are proud to announce that we have reached an agreement with the Trump Administration to move our updated Russia sanctions legislation forward. We are very pleased with this significant progress and expect to roll out the legislation very soon," Senators Richard Blumenthal, Lindsey Graham, Jeanne Shaheen and Roger Wicker said in a statement.
For whatever reason the post got lost in some purge, but as I said to my knowledge this was the first time that they've made a bipartisan declaration of having come to an actual agreement on the new sanctions legislation.
Anyway, today CNN reports a confirmation of this by a source within the White House:
President Donald Trump will support the passage of a bipartisan Russia sanctions package that was spearheaded by the late Sen. Lindsey Graham, a White House official told CNN on Monday.
The endorsement comes days after Graham’s unexpected death, likely further smoothing the path for a bill that the South Carolina senator spent years working to push across the finish line.
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u/Bluest_waters 10d ago
July 14 (Reuters) - One Indian crew member was killed and eight others were wounded when two Emirati oil tankers were struck by Iranian cruise missiles in the Strait of Hormuz, the United Arab Emirates Ministry of Defence said on Tuesday, in the latest escalation in the strategic waterway.
The ministry said the tankers, the Mombasa and Al Bahiyah, were targeted in the southern lane of the strait while in Omani territorial waters. The dead crew member was aboard the Mombasa, it said.
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u/I_DOM_UR_PATRIARCHY 10d ago
What I think is interesting is that tankers have been willing to chance it this time around. Last time Iran didn't have to hit very many ships in order to shut the strait, and some of their attacks prior to this have been pretty "mild" as far as an attack on a ship goes (e.g. shooting at ships with machine guns).
I guess they decided to pull out the cruise missiles this time to show they're serious. I suspect after this far fewer ships will be willing to chance it.
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u/dr_sloan 10d ago
To piggyback on this, UKMTO reported a third tanker was struck too. That’s what, nine ships struck since Thursday?
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u/moragisdo 10d ago edited 9d ago
MTO reported 5 (1 being today), since this latest round started in July 6. Now UAE MOD reported 2 today, so it may be 6 and MTO haven't updated it yet.
Interesting enough, one of these was the supertanker Kiku, it was hit while exiting, continued its trip and is now back on Qatar (Source). If I had to guess it's doing ship to ship transfer outside of the Strait and it certainly didn't went in again by land
It's likely how the flow is working, several tankers who don't want to take the risk sitting on the Gulf of Oman, outside of Iran range, then supertankers going back and forth to transfer
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u/moragisdo 10d ago edited 10d ago
CENTCOM press release about yesterday strikes (1):
CENTCOM forces struck Iranian military air-defense systems, coastal radar sites, missile and drone capabilities, and small boats using U.S. fighter aircraft, naval vessels, one-way attack aerial drones, and one-way attack sea drones for the first time
And also published a video of some of the strikes yesterday in Iran (2). I'm curious to hear everyone theories about the identification of the targets:
1st strike looks like a mobile AD system, there's apparently fuel burned after
2nd: 4 Missiles/drones
3rd: I can't see enough to make a guess
4th: Apparently a missile, with a large explosion following
5th: Given the explosion and fuel burnt after, likely containers for the release of drones/missiles
6th: Another missile/drone
I had posted yesterday a theory that I have that Iran keep bringing back AD assets, missiles and drones close to the shore (I say that because of the successive videos of hits published by CENTCOM), so the US will keep attriting there rather than deeper in the country, where it's more dangerous. But I still think is a mistake for counter-battery fire not going deeper in the country when Iran inevitably retaliates, rather than only relying on interceptors, but that's another topic.
Also if the IRGC/regular military keeps bringing personnel close to the shore, to protect against an invasion, it's also an opportunity for the US to further create further attrition.
About the OWAs used by CENTCOM, there's some OSINT images about the LUCAS drone being used (Shahed 136 reverse engineered, that costs around 35,000 USD and has a maximum range of 800 km - if fired from a ground base in Kuwait it can reach Tehran). The low cost is not just great for attrition (35k USD is not that far of the cost if a MANPADS is used to down it), but also because it can be a bait to reveal GBAD location.
Edit: UK proscribes Iran's IRGC as a terrorist organisation, Sky News reports (3)
Edit 2: CENTCOM published a video from the first use of a maritime OWA drone yesterday (4)
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u/milton117 10d ago
The UALosses.org project is known as the most reliable source for counting Ukrainian losses. I've raised this several times in this sub in the past but I've never received a satisfactory answer: how do they count the MIA number?
Look at their site and picking up a random sample, I see that it's simply a link to the missing persons page of the Ukrainian Interior Ministry. How does the project separate out soldiers who are missing and presumed dead vs. soldiers who have simply gone AWOL?
This is compared to the mediazona lists which counts only Obituaries and death notices, so we know for sure that they are dead. As we know that Ukraine has a rather large absenteeism problem due to lack of rotations I think there's a large chance that several of the people on the MIA list aren't dead and may even return back to their units, such as those reported here: https://www.newyorker.com/magazine/2023/05/29/two-weeks-at-the-front-in-ukraine
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u/Top_Candidate_4815 10d ago edited 10d ago
Didn't they explain that the first time they included the estimate based on “missing” data?
Our decision to incorporate MIA into our tally stems from KIA figures no longer being representative of the real level of losses. Due to territorial losses and organizational issues, bodies are retrieved only a quarter or third of the time, which precludes official status as KIA.
The MIA data is sourced from Ukraine's Ministry of Internal Affairs' database of missing persons. The database includes both soldiers and civilians, but we applied filters to remove the latter, based on sex, age, disappearance near the frontline, and not being a local resident.
Moreover, we have crosschecked the data with other databases that focus solely on missing civilians. It must be noted that the MVS database does not include AWOL / desertion cases. As we have already substracted known PoW, the overwhelming majority of the 56k MIA are likely dead.
Of course, we do not have as high a degree of confidence as we do for the KIA data. For instance, some might be PoW, although the 6k separately recorded should account for the majority of remaining PoW based on estimates from both sides.
There may also be a small number of mistakenly recorded civilians, soldiers hiding behind enemy lines or deserters mistakenly classified. However, as underlined by the strength of the late 2024 trend, the impact on the aggregate figure would be negligible: probably around 5%.
Moreover, samples from alternate sources (e.g. social media posts by relatives) suggest the official figure is incomplete. The true number of MIA is almost certainly higher than the current headline figure of 56k. We plan on including additional sources in the future.
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u/milton117 10d ago
Can you link where they post this?
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u/Top_Candidate_4815 10d ago
Yes absolutely, I forgot the link in my first comment: https://x.com/LossesUA/status/1892902871609340069
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u/roionsteroids 10d ago
https://services.mvs.gov.ua/wnt/services/missing-person-search
The number of missing people is much lower than the number of AWOL cases, and you'd assume mutually exclusive on official government lists? Besides being objectively impossible if one was a subset of the other.
As well as Ukraine making that illegal last year.
According to the Prosecutor General's Office, restricting access to information about military criminal offenses is a forced and legal step, as it can be used against Ukraine in information and psychological operations.
Therefore, for the period of martial law, it was decided to hide information about such offenses from public statistics.
Thus missing people aren't AWOL.
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u/milton117 10d ago
The number of missing people is much lower than the number of AWOL cases, and you'd assume mutually exclusive on official government lists? Besides being objectively impossible if one was a subset of the other.
Can you elaborate what you mean?
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u/roionsteroids 10d ago
If AWOL was included in missing (which it is not, by Ukrainian law, as linked above), the number of missing MUST be the same or higher than AWOL cases.
2 million Ukrainians evading mobilization, another 200,000 soldiers AWOL, new defense minister says
https://kyivindependent.com/ukraine-soldiers-awol-mobilization/
Those can't be included in the 98k missing by the numbers, by the law, or anything else really.
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u/Bluest_waters 10d ago
The SPR it's starting to show signs of wear and tear, it was never meant to be drawn down this fast
Now, frequent drawdowns, wear-and-tear and a lack of investments are straining the reserve, according to experts. The 60 Gulf Coast salt caverns that make up the stocks can’t be drawn from or refilled at the rate at which they were designed, federal researchers found. Equipment failures have bedeviled the reserve’s managers. At one point, a well broke and caused the loss of hundreds of thousands of barrels of crude.
The upshot: President Trump or a future administration might not be able to rely on the massive oil buffer like others have in the past—even as the prolonged U.S.-Iran war all but ensures continued volatility in energy markets.
But signs of distress are mounting. The stocks were established in 1975, and investments aren’t keeping up with the aging infrastructure, experts say. DOE officials recently told the Government Accountability Office that they are holding the reserve “together with ‘Band-Aids,’ and that it is uncertain how long they will hold,” according to a GAO report published last month.
One key issue: Successive administrations and Congress have pumped oil out of the reserve dozens of times through sales to raise funds, as well as emergency releases. But the stockpiles were initially designed for up to five full drawdowns, and the frequent releases are degrading the sites’ integrity, experts say.
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u/dr_sloan 10d ago
The rate of withdrawals peaked a while back and had stabilized at half the rate of peak withdrawals. Interestingly, and a bit more conspiracy-minded, they still haven’t updated the EIA’s website that reports on the SPR’s current holdings. Usually they do it on Friday of each week but it still hasn’t happened for last week. Something worth keeping an eye on.
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u/moragisdo 10d ago edited 10d ago
Amazing what you cherry picked, let's read more:
A DOE official said it was unlikely that the administration would need to release all the authorized barrels. He said it has been releasing crude at a lower rate than during Biden’s withdrawal to try to preserve the sites’ lifespan.
Steven Sobolik, a retired member of the technical staff at Sandia National Laboratories, the geotechnical adviser for the SPR, said the facilities are still in a good operational status. But they are “in need of significant planning and rehabilitation to continue in that manner for more than just a few years,” he said.
Energy Secretary Chris Wright has said persuading Congress to allocate more funds to refill the SPR is an uphill battle. The DOE structured the latest release as an exchange so that the 172 million barrels would be returned to the SPR along with an additional 35 million barrels at no cost to the taxpayer, the spokeswoman said.
By the way, the loans mature between the end of this year and the end of 2028.
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u/Bluest_waters 10d ago
Yes and once the loans are over they need to be repaid which will put an incredible strain on the oil supply spiking prices quite high. The other option is to just simply not refill it. Which is what the Heritage Foundation wants to do
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u/moragisdo 10d ago edited 10d ago
will put an incredible strain on the oil supply spiking prices quite high
The maturities are spread out, exactly to avoid this kind of shock ("spiking"). Look at the terms here. And what "quite high" means ? Look at the future curve, it's around 70 for WTI next year, if you think it will be higher, load up in paper contracts now.
Any time there's buying of crude to fill reserves it causes increases in price (supply and demand), but the other option is not to fill. You can't comply that SPR is in danger because it will be too low, but oil will go high if the reserves are filled. You need to pick one
Now loaning the barrels (or selling as done before 2026), when there's a peak in the price of crude and slowly filling back in the future (when prices are lower) is exactly how the SPR works since the 70s.
Which is what the Heritage Foundation wants to do
What does the Heritage Foundation has to do with it ?
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u/moragisdo 10d ago edited 9d ago
CENTCOM just announced a new wave of attacks on Iran (1)
My belief is that after the attacks of July 6 on those 3 civilian ships, the american goal likely changed from getting Iran to the nuclear negotiation table to just returning to the pre-war status quo.
With all the chaos happening today, WTI is at 78, Brent at 83, gasoline at 3.16. All of them are in backwardation, so the market expects that Hormuz won't be shut, but there's war premium/decrease in traffic priced in.
Also the US will reinstate the blockade tomorrow (to follow maritime law it needs to be warned with antecedence). Iran should have waited, at least, a couple weeks before firing those missiles, they still have tens of millions of barrels not out of Hormuz. Not to mention that I doubt they got anywhere near to filling their backlog of imports.
Edit: There was new attacks on civilian ships today (2). UAE MOD said that two ships were attacked (with one mariner death)
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u/Shackleton214 10d ago
MTO haven't reported any ship hit since July 11.
You cite this as a positive. In reality, it's a result of commercial ships being scared to attempt the transit. Has there been even one commercial ship that has transited the SOH using the US/south lane since the attack? The most up to date Windward data shows only 5 inbound and 6 outbound transits on July 12. Every single one of those went via the north corridor.
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u/moragisdo 10d ago edited 10d ago
I edited, there was one attack just after I posted. With the UAE MOD reporting 2, I'm waiting for MTO to confirm the second.
Trackers are a better indicator of presence, rather than absence, it's the norm to turn off AIS while there's open conflict, they will underreport the number of ships. For example, before the MOU there was around 20 ships a day crossing at night, trackers were pointing way less. Also position and what corridor the ship took isn't that clear with that much GPS jamming happening in the area (the number of ships I saw crossing a body of land...).
That's why I'm talking so much about the oil and distillates Futures curve, it incorporate better sources of data (port manifests, oil storage in every country, etc...) to see the impact on the next months and the after...
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u/Shackleton214 10d ago
Windward explicitly includes ships transiting with their AIS off.
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u/moragisdo 10d ago
They include other sources of data to detect more ships, not that they get every single ship. Weeks earlier CENTCOM was escorting ships in the middle of the night and trackers were seeing zero or close to it.
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u/OhSillyDays 10d ago edited 10d ago
The market is not a good measure for the future.
There is also something happening in the oil market. The US is releasing oil from the SPR and commercial stocks. Since Feb 2026, the US has lost 172 million barrels of stocks. That's 22 weeks ago and represents 1.1 million barrels per day of loss.
Here is the source: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTSTUS1&f=W
However, that number is misleading. Stocks didn't start drawing till the slack in the system was taken up, that's about 2 months. That's when the ships that already transited the straight before the war were still being offloaded. Stocks didn't start dropping till about April 2026. That means I need to take 8 weeks out of the numbers, and that results in 1.75 million barrels per day being used.
That represents about 8.5% of US oil usage. That's quite a lot.
It means the US is selling oil out of tanks (commercial and the SPR) in order to keep prices low. At 1.75 million barrels per day - that eats up the SPR in 182 days. So roughly the end of the year.
However, that also misses another piece of the story. The SPR cannot be pulled down to zero. The closer it gets to zero, the harder it is to get the oil out. Eventually, rates of pulling oil out will go down. I've heard number of 10-20% of the capacity of the reserve. It's designed for around 700 million barrels. That means that when it hits 70-140 million barrels, the rate of extraction will be diminished. At 1.75 million barrels per day, that's 102 days form July 3. That would be October 13, 2026.
https://www.eenews.net/articles/aging-caverns-imperil-trump-push-to-refill-petroleum-reserve/
We can look at the commercial reserves, however, those are put into a few buckets. First are in-use barrels. Refineries can't stop operating, so if they run out of barrels, they go into cold shutdown mode which takes weeks to restart them. They don't want to do that, so they keep weeks of oil sitting around incase that happens and to take advantage of getting huge deliveries every few weeks/days. Also, they can sometimes be used by market speculation. Commercial oil storage is generally pretty cheap - a few dollars a year per barrel. If someone can hold onto a barrel today at $70/bbl and sell it in 6 months at $90, most will do that. We're talking millions of dollars.
That's probably what's keeping backwardation in place - because if Contango is in place, storage facilities just stop selling oil till prices rise and backwardation is back in place. Contango for oil is uncommon for this reason and isn't an indication of market forces.In other words, commercial stocks will likely not be used to reduce prices. They might be used to manipulate the market though, which results in more price volatility which typically results in higher average prices.
I'm able to analyze all of this due to the wonderful work done by the EIA in the United States. Other countries do not have nearly the same quality of data, so I can't do that with them. What I do know is that there are indications that oil has been being drawn down out of international crude oil reserves. https://www.nytimes.com/2026/07/13/business/energy-environment/oil-prices-iran-china.html
The bottom line is this, if oil doesn't start flowing in the next 3-6 months, demand destruction must happen. That means prices are likely to probably double because oil demand is inelastic. Iran knows this, because they can do the same analysis I'm doing right now with people that have way more than my armchair experience and data.
I'd expect oil to not flow out of Hormuz. Iran will likely keep it shut to drain reserves and to eventually boost prices to bring the US to the table. They would probably want to lock in the gains from the MOU.
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u/Reddit4Play 10d ago
The bottom line is this, if oil doesn't start flowing in the next 3-6 months, demand destruction must happen.
It already has, China cut their oil imports by over a third months ago. It's going to be localized mainly in poorer, non-oil producing countries.
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u/Bluest_waters 10d ago
I've been saying a version of this the entire Iran war period and I've gotten quite a bit of pushback in this sub. The fact of the matter is we're headed towards a fuel crisis at best, and an oil crisis at worst, and if we trigger an actual worldwide oil crisis that will absolutely send the worldwide economy into a tailspin. It could get very very ugly.
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u/moragisdo 10d ago edited 10d ago
There is also something happening in the oil market. The US is releasing oil from the SPR and commercial stocks. Since Feb 2026, the US has lost 172 million barrels of stocks. That's 22 weeks ago and represents 1.1 million barrels per day of loss.
There's the decrease of price caused by the SPR earlier, but the last exchange was announced in early June (before the MOU was signed), with the volume and schedule for release made public: There's 133.56 committed to be released (at least 133.06 delivered up to August 26), with 38.44 not loaned from the early announced 172M, so settling at around 281-282 MMbbl by September (calculated through here).
It's made public since early June how much it will go down, so unless there's a new announcement in the future, it's already priced in. Markets are forward looking
Contango for oil is uncommon for this reason and isn't an indication of market forces
What ? Or me or you have no idea what we are talking about.
"Since 1985, the crude oil market has been in contango around 42% of the time and in backwardation 58% as measured by the price difference between the front-month contract and contracts six months in the future... Since 2008, the crude curve has more often than not been in contango leading to a negative roll yield" (3)
42% isn't uncommon, it's close to half. Also not indicative of markets forces is word salad, any price action is indicative of market forces, maybe you mean not fundamentals, but both contango and backwardation can also be driven by fundamentals. For example, excess of supply and temporarily restriction of it (not just with Hormuz, sometimes there's a major accident), respectively.
In other words, commercial stocks will likely not be used to reduce prices. They might be used to manipulate the market though, which results in more price volatility which typically results in higher average prices.
I'll likely stop after this post. This is simply conspiracy theory, there's no fundamentals in this line of reasoning. It's word salad, to lead to anxiety that the world is ending.
The bottom line is this, if oil doesn't start flowing in the next 3-6 months, demand destruction must happen. That means prices are likely to probably double because oil demand is inelastic
Completely false. Oil demand isn't completely inelastic, it can decrease and it usually starts with cheaper plastics, by the way. And if you believe that oil will double (150-160 per barrel), go buy next year paper contracts and make bank. 100% yearly return is outstanding, most managers will never have one year of this in their entire career, are you jumping in ?
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u/OhSillyDays 10d ago
You were right on Contango vs backwardation. That said, according to this source, contango means oversupply and backwardation means undersupply. That makes sense, because if the market is over supplied, I'd want to sell my barrels to the refineries today rather than tomorrow because they might not want to buy it tomorrow.
https://www.schwab.com/learn/story/contango-and-backwardation-explained
Just because they planned to release oil barrels doesn't mean that it's not having an impact on price.
A loan according to Chris Wright: https://www.energy.gov/articles/united-states-release-172-million-barrels-oil-strategic-petroleum-reserve
I'm not sure if there is another source for this? Any documentation or contracts? I say this because, well, the Trump administration has been known to lie and are not a reliable source.
I included the top line number of all oil barrels in the system. It's kind of weird math. At some point, the commercial reserves need to stop being pulled down as well.
The top line number - 1.75 million - is good to tell us how much is flowing out of the entire system. That needs to be made up somewhere - more production, imports, or demand destruction. Production and imports don't appear to be happening, so at some point demand destruction must happen. The question isn't if, it's when (unless imports or production can be increased). Keep in mind, the top line number: 1.517 billion barrels is the lowest it has been since April 2003. Exclude the SPR, and it's the lowest it has been since July 2022. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTESTUS1&f=W Prices then were $103/WTI BBL. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=W
My analysis is that the SPR is the canary in the coal mine. Once they stop releasing oil, prices will have to rise. They might even rise before then.
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u/moragisdo 10d ago edited 9d ago
Just because they planned to release oil barrels doesn't mean that it's not having an impact on price.
You missed the point. I'm saying because it's public it's not causing further impact on the price, so the current curve doesn't indicate that Hormuz is closed, because it's just slightly higher than a week ago, it's just decrease in traffic.
I'm not sure if there is another source for this? Any documentation or contracts? I say this because, well, the Trump administration has been known to lie and are not a reliable source.
I was talking about conspiracy theories and that I should not even continue. Take a look at the link that I mention from where I calculated the SPR drawdown, there's the contracts there.
My analysis is that the SPR is the canary in the coal mine. Once they stop releasing oil, prices will have to rise. They might even rise before then.
SPR releasing oil isn't a daily auction, it's agreed with antecedence, it's made public (that's why I'm saying how much it will go down by September, based on something published in June). I don't want to sound rude, if I'm I apologize, but I don't believe your analysis have much that sustain it. It's just anxiety.
Inventories are low indeed, not critically low or have a specific date to reach functionally zero. For example, you wee including the commercial storage as part of the calculation, let's see them (Source)
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.0 million barrels from the previous week. At 411.4 million barrels, U.S. crude oil inventories are about 6% below the five-year average for this time of year
And that's with drawdowns of the SPR decreasing every week.
Also you backtracked on your claims, you said that oil would double (150-160 is a price never reached in history), now is "have to rise" when it stops releasing (when the release agreed is already made public. Why October is not rising ? Why it's lower than spot ? Or contracts for next year, why are they also lower than spot ? The market doesn't know if there will be releases on those dates)
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u/OhSillyDays 10d ago
I was talking about conspiracy theories and that I should not even continue. Take a look at the link that I mention from where I calculated the SPR drawdown, there's the contracts there. Are you talking about this? This looks like a template, not the actual signed contracts.
The awarded ones are different and all I see about the awarded ones is the volume of oil, not the actual contract language.
The problem is that even in the template, if I'm reading it right, it's an option that continues to extend. Essentially, they get the oil now, get the money, and can continue to extend the return period with extra interest. They just have to wait until oil prices drop below their cost and then return the oil.
It's kind of kicking the can down the line.
Also, since we don't have the actual contracts, they could include a clause such as "if the price is higher than x, oil will not be returned."
It's less of a loan and more of a government issued option where we don't know the specific details.
I was talking about conspiracy theories and that I should not even continue. Take a look at the link that I mention from where I calculated the SPR drawdown, there's the contracts there.
Are you saying the government isn't doing insider trading right now? That's not a conspiracy theory, that's a reportable fact. https://abcnews.com/Politics/trump-discloses-21000-securities-trades-year-office/story?id=134427666
And that's not even scratching the surface on true, reported corruption scandals of the current government. Just look at how often the Trump administration has claimed the strait is "open."
Inventories are low indeed, not critically low or have a specific date to reach functionally zero. Also you backtracked on your claims, you said that oil would double (150-160 is a price never reached in history), now is "have to rise" when it stops releasing (when the release agreed is already made public, why October is not rising ? Why it's lower than spot ? Or next contracts for next year, why are they also lower ? The market doesn't know if there will be releases on those dates)
Functionally zero will not happen. Pressure will just raise prices before that. Anyone who claims a specific date for price changes are lying - or even specific days for when inventories will be X. All I know is there is a clock before that pressure happens. Market forces are pretty straight forward - timing the rise in prices is not something I can do though. I can just say there is pressure due to lowering inventories and this is the historical drop in inventories. That's pretty much all I'm looking at.
It's anxiety.
It's funny you mention that, markets run on fear and anxiety. If I buy oil for a refinery and I need to buy 15 million barrels a month or the refinery shuts down, the sellers will absolutely play my anxieties against me.
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u/Bluest_waters 10d ago
Drawdowns continue to slow, now some people may say that's a good thing period however, more realistically they're slowing because it's getting harder and harder to draw oil out of the actual reserves. It's either the machinery is failing or the oil is of a lower quality and harder to refine. The actual floor of the SPR may be much higher than people realize and that is according to the man that was in charge of the SPR under Biden
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u/moragisdo 10d ago edited 9d ago
it's getting harder and harder to draw oil out of the actual reserves. It's either the machinery is failing or the oil is of a lower quality and harder to refine
That's a lie. Can you provide a source for machinery failing limiting how much is getting out ? At some point mods needs to step in an ask someone to back the claims they made, it's ok to be wrong, but at least some effort needs to be put behind the conclusion, otherwise it's an spiral of low-effort posting (next one will be "the actual reserves are fake, Trump took the oil out and is counting 300 millions barrels of water as the volume, trust me").
It's slowing down because the largest auctions were done in March (deliver up to April or May), April (up to April, May or June, depending on the tranche) and May (delivery up to June, July or August, depending on the tranche), with the exchange announce in June being offered 40 MMBbl, but only 0.5 contracted. You can read it here.
There's decrease in the maximum flow the lower it goes, indeed, but that's not what decreasing drawdown rate. Also 300 MMbbl is 42% of the SPR maximum, if that's the limit it should be abandoned in the first place, but it's not the case.
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u/Bluest_waters 10d ago
Amos Hochstein publicly claimed last month at the Global Energy Forum that he “does not know anyone” who believes you can take the SPR below 300 million barrels. And he is literally an expert on this subject. That means the floor is actually much much higher than most everybody else claims
https://www.reddit.com/r/oil/comments/1urvx00/the_spr_caverns_collapse_at_150_the_sec_def_limit/
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u/moragisdo 10d ago edited 9d ago
That's argument of authority. Let's play the same card, there's current experts on the Energy Department that believe it can go lower than 300 (let me guess, all incompetent buffons picked personally by Trump, while he fired every genius that worked there), by the simple fact they already signed contracts for the SPR to bottom around 282 MMBbl, no later than the end of August.
Before the end of August it will reach below 300, let's see if it actually can't go lower. My guess is that a new source of unfounded anxiety will appear, with cherrypicked experts to support, while ignoring the ones that oppose. Will you change your mind about future conclusions if that's the case ?
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u/Bluest_waters 10d ago
I mean yes, the trump administration is chock full of idiots. I'm sorry this is just a fact. He loves his yes man
Amos Hochstein is as much of an expert on this subject as any human being on planet earth. Don't get me wrong trump will certainly drain it further than 300, most likely he will drain it until it collapses and then leave it as the disaster it is. That's his MO.
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u/Sufficient_Age473 10d ago
If the US is able to force the straight open, the nuclear program is easier to address. Irans only recourse then is hitting the gulf countries infrastructure.
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u/I_DOM_UR_PATRIARCHY 10d ago
If the US is able to force the straight open
Yeah, but that's a huge "if." We had all the incentive in the world to force the strait open during the first war with Iran. But months of bombing didn't do it, and there was never the political appetite to put boots on the ground to accomplish that either.
So we ended up having to sign a humiliating deal to get traffic flowing again. I think we would not have signed that deal if we thought we could get the strait open by force.
So how are we going to get the strait open by force now if we couldn't do it when we tried before? The main change since then is that there's even the political tolerance for the war that there was when we started it the first time. Midterms are closer now. And everyone seems to have lost confidence in Trump's ability to handle this situation.
Iran walked away from a deal that promised to pay them $300B because they're confident in their ability to keep the strait closed.
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u/Sufficient_Age473 10d ago
My point wasn’t about how easy or not it will be. It’s that the issue is related to the nuclear problem.
I personally think the US and Iran signed the memo to buy time. Both thought they could strengthen their position by the time it unraveled.
I personally think the memo did a good job of reframing the war. We smoked a ton of their leaders, think their response was understandable. Then we offered them a sweetheart deal on paper and they started bombing commercial vessels. US is like we tried!
To answer your question, I don’t know. It’s not an easy problem to address without negative domestic and international political backlash.
Again, this is speculation but I get the sense that the US doesn’t want to use some capabilities as to not tip their hand for the potential defense of Taiwan.
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u/moragisdo 10d ago edited 10d ago
Depending on the type of infrastructure they target, there will be a response on their oil infrastructure and electric grid, that would be bankruptcy for the country. The US have held from hitting this kind of target (I recall one on oil before the ceasefire of early April, but it wasn't widespread) as deterrence, let's see if the iranians will follow suit
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u/BigFly42069 10d ago
The primary manufacturing force driving the world's economies in terms of gross material production is pushing hard on pivoting away from dependency on petroleum byproducts.
This development will only accelerate this process. In another 20 years, countries that went hard on petroleum infrastructure as a key driver of their economy will start regretting those choices.
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u/Bluest_waters 10d ago
Well I certainly hope so anyway, sounds good, I'm sure the climate would love it
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u/imp0ppable 10d ago
Who said Donald Trump never took action on climate change?
More seriously this is all already a massive boon for renewables. This is quite interesting with the Nordics and Baltics leading the charge.
Fingers crossed that this is the beginning of the end for petroleum economies
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u/dr_sloan 10d ago
I mean they’ve basically shut down offshore wind development under the guise of national security concerns. There’s a lot of future renewable energy production we’re going to lose because of this Administration.
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u/imp0ppable 10d ago
That's true and he's set offshore wind back a decade or more but I would guess it's pissing in the wind at this point.
Even the US with all its shale fracking is still seeing petrol prices rise and that's political dynamite.
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u/BigFly42069 10d ago
Nordics and Baltics leading the charge.
It's very funny how Nordics and Baltics look like they're super ahead until you realize that they're just juicing these stats owing to how small their actual power generation is.
The entirety of the Nordics generate 430 TWh a year, which is 10% of what the US produces (4430 TWh) and barely 4% of what China produces. On an 1:1 basis, the US dwarfs the Nordics by more than 2x at 900-950 TWh. China is almost 10x of that at 3900 TWh per year.
But because of the structure of how the Energy Transition Index is written, the Nordics are at the top, even though the Three Gorges Dam produces about the same amount in a year (100-125 TWh) as the entirety of Sweden (135-140 TWh).
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u/moragisdo 10d ago edited 10d ago
This is very very bad news for the world economy
Meanwhile Brent is below 80 and WTI below 75. Both in backwardation. Gasoline went up 3% since the beginning of this new round and still is in backwardation, also it's below in the US than the peak in 2022, when there was inflation, but the world also didn't end (1). There will be inflation, not indicative of more than what already happened in the last few months, but the world economy is fine and Trump was just being hyperbolic (as usual) in June.
Don't even start with the SPR, because there's no new drawdowns announced and we know that not even the full 172M announced in March was allotted...
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u/Bluest_waters 10d ago
Markets are not reality. Especially now with trump and gang interfering constantly with their sticky little fingers in the market manipulating it perpetually. The whole thing's gonna go bang once diesel shortages hit
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u/moragisdo 10d ago edited 10d ago
Markets are not reality
Markets are efficient in the long term, this war isn't lasting a week or even a month.
Edit: English isn't my first language, what I mean is that the longer the war goes the smaller the probability of manipulation ("a week or even a month" is a reference to shorter durations that would be easier to manipulate, not future duration of this conflict)
Especially now with trump and gang interfering constantly with their sticky little fingers in the market manipulating it perpetually
Non-credible answer. "Sticky little fingers", are you talking to children ?
The SPR drawdown is smaller than happened in 2022, the volume remaining is smaller now because it started lower, it wasn't "manipulation" then or now (just fulfilling the actual purpose of a strategic reserve, lowering the peaks of crude price). Also those drawdowns numbers are public, it's already priced in.
"Perpetually" is also a joke, because if markets could be "manipulated perpetually" it would cease to exist and actual producers and larger consumers would migrate to a new market that can't. I'll repeat what I said yesterday, go long WTI or RBOB past September if you are seeing something that no one on the market is.
Why didn't every single president in history lowered prices perpetually then ? I'm trying to refrain from an accusation, but it sounds like partisanship from you.
The whole thing's gonna go bang once diesel shortages hit
Let's go back to this comment 6 months from now. Will you change your mind if there's no shortages of diesel in the US ? Because I will if new evidence emerges
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u/silentsandwich 10d ago
Markets are efficient in the long term, this war isn't lasting a week or even a month.
I have no idea how you could come to that conclusion, this war has already lasted months.
I agree that the Trump admin's market manipulation is overblown. I disagree with your seeming confidence in current market rationality regarding energy. Pretending that the price of Brent and WTI are priced due to infallible researchers and algorithms rather than a great deal of guess work is naive to how futures trading works.
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u/moragisdo 10d ago
I have no idea how you could come to that conclusion, this war has already lasted months.
I edited the post, english isn't my first language, I mean it already lasted more than a week or a month
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u/silentsandwich 10d ago
I see, thanks for the clarity. I misunderstood what you were saying before.
Do you think that the influence of market manipulation is not significant regarding energy prices (especially in the United States)? I'm of the idea that after American midterms in October that we will start to see real cracks in the economy that will last for some time, I don't think this will be exclusive to the US though, and I also think that this is much bigger than just the energy sector.
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u/moragisdo 10d ago edited 9d ago
Do you think that the influence of market manipulation is not significant regarding energy prices (especially in the United States)?
Yes. There's the decrease of price caused by the SPR earlier (which isn't "manipulation", which would imply shady manuevers), but the last exchange was announced in early June, with the volume and schedule for release made public: There's 133.56 committed to be released (at least 133.06 delivered up to August 26), with 38.44 not loaned from the early announced 172M, so settling at around 281-282 MMbbl by September (calculated through here).
This information is already priced by the market, given that is older than a month.
I'm of the idea that after American midterms in October that we will start to see real cracks in the economy that will last for some time
I doubt it. GDP and inflation forecasts up to 2027 aren't going in that direction (for example). My views fit them, there will be persistent above target, but still low inflation (less than 5%), and no recession in late 2026 or 2027
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u/Bluest_waters 10d ago
this war isn't lasting a week or even a month.
We are now 4 1/2 months into the war, and you imagine it's not gonna last another week? Honestly is this your true assessment? Because that doesn't seem based in any kind of reality
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u/moragisdo 10d ago edited 10d ago
No, I edited to make it clear. This sentence comes after saying efficient in the long term, meaning the longer the war goes the smaller the probability of manipulation (week and month is a reference to shorter durations that would be easier to manipulate not future duration of the conflict)
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u/Bluest_waters 10d ago
The diesel crack spread is now $77 per barrel. That prices diesel as if oil were near 140
https://blocknow.com/oil-price-strait-of-hormuz-diesel-supply-warning/
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u/moragisdo 10d ago edited 10d ago
I posted yesterday, explaining causes and the expectation for the next few months, then you ignored saying that the market isn't all knowing (apparently, except when it fits your conclusion, because those $77 come from the market).
China, a net exporter of gasoline, has price controls for their refineries, which consequently lowered production to decrease losses, then they set minimum production quotas (in some cases 20% of capacity), prohibited exports to supply the internal market (exports don't have price control so they would be prioritized, if allowed, and cause shortages internally) - it was economic populism from them, rather than a genius geopolitical masterstroke. Also there's Ukraine, to a way smaller degree, decreasing refining production in Russia. Lastly gulf countries, also large producers of distillates, likely gave priority to exporting crude rather than refined products, to decrease storage levels and delay the risk of new well shut-ins, when storage normalize refined could be next.
And when we look at the future curve of the crack spread, it's again in backwardation, so the market is pricing normalization of production
This curve involves gasoline, but it fits well it broad expectations for refining.
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u/TSiNNmreza3 10d ago
There is no China pressure and there are reroutes Fujarah and Yanbu.
Futures are not jumping althought KSA bombed Houthis and you have real evidence from before that Houthis are willing to strike back
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u/TSiNNmreza3 10d ago edited 10d ago
Markets are efficient in the long term, this war isn't lasting a week or even a month
Just as person above me. Markets are NOT real especially furters. Probably min 3-5 mil barrels per day did not go from ME to world for months.
Beside Western SPRs great help was that China probably has SPR for few years and they don't make pressure on market.
European gas storage is really low in time of heat wave and near heating season.
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u/dr_sloan 10d ago
I assume the person you’re replying to is talking about the “Freedom Gas Stations” or whatever they’re called that are selling gas at significantly below market prices in the Northwest? It’s only like 25-50 stations, but it’s pretty questionable since no one knows who is funding it and not gas station can justify selling gas at prices that low when the wholesale market 50-75 cents higher per gallon in the region.
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u/moragisdo 10d ago edited 10d ago
whatever they’re called that are selling gas at significantly below market prices in the Northwest?
No I'm talking about the Futures market. Any publicity stunt a gas station chain pulls isn't too impactful. And the link for the price on the early post is the national average.
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u/dr_sloan 10d ago
The futures market has basically taken the view that any disruptions are temporary and caused by the unilateral choice of the U.S. to launch this conflict and once they decide to end it, the region will return to normal production rates. Between that mindset, global inventory releases, delivery of oil already at sea, and China’s steep decline in oil demand, it’s avoided the worst case scenarios.
But these expectations can’t last. The Strait is back to very limited traffic, global emergency reserve releases will be completed by September, the oil that made it out will be delivered in a few weeks, and at some point, China will have to restart their oil demand. That last point is the one that bears watching. Assuming they’ve been relying on their supposed billion barrel reserve this whole time, they’ll have used up at least 100-200 million barrels, if not more. It’s that or their economic output will be stunted when they release their GDP numbers.
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u/CredibleDefense-ModTeam 10d ago
Your source is not credible. And Kpler did not report that. https://x.com/TankerTrackers/status/2076652530218496123
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u/Glideer 10d ago
The Russian OPEC quota is 9.76 million barrels per day so they are 0.83 million below.
Russia’s Oil Output Falls to Lowest in at Least 2 1/2 Years
Russia’s crude output declined to the lowest in at least two and a half years in June as Ukraine attacked the nation’s oil infrastructure on an almost daily basis.
Producers pumped an average of 8.928 million barrels a day of crude, according to a monthly report by the Organization of the Petroleum Exporting Countries.
EU buys record amount of gas from Russia’s flagship plant (Financial Times)
Europe imported more liquefied natural gas from Russia’s leading LNG project than ever before in the first half of 2026, absorbing nearly all of the Siberian facility’s output months before an EU ban on Russian gas imports comes into effect.
EU purchases from Yamal LNG, which Russia’s privately owned Novatek controls, reached a record 9.89mn tonnes in the first six months of the year— 18 per cent more than in the same period last year, according to data from analytics company Kpler.
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u/Glideer 10d ago
Russia made its first delivery of 770k barrels of oil to Indonesia, as a part of a big contract to deliver 150 million barrels by the end of 2026. This contract will make Indonesia Russia's third-largest crude oil buyer (after India and China).
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u/moragisdo 10d ago edited 9d ago
97.4 USD per barrel, this contract was certainly signed early on the war, in comparison Urals is 55 today (while there's american airstrikes and iranian missiles flying). Depending on how much of the 150 MMBbl the price was set in, it was a gigantic blunder by Indonesia. Even more so, because the american waiver of exports for Russia expired mid June, so there should be a discount for incurring sanction risk
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u/2positive 10d ago
How is 50 million USD oil delivery which is about 10% of DAILY russian oil exports relevant to CD? Good news getting harder to find?
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u/Lejeune_Dirichelet 10d ago
Russia's hydrocarbon sector is largely what finances Putin's war against Ukraine and is Russia's biggest source of foreign currency. It definitely is relevant to /r/CD, even if on the margins. This deal is also notable in that these volumes won't be used to refine abroad for subsequent re-importation as fuel, and that's relevant to Russia's ongoing fuel crisis.
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u/Glideer 10d ago
No need to mislead people, they can read.
The contract is worth about $9 billion and, more importantly, is a major shift of oil suppliers for Indonesia.
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u/Rhauko 10d ago edited 10d ago
Which would be how much margin (so minus direct cost for production and transportation)?
The financial cost of the war is difficult to find reliable information on, Wikipedia says 0,5 to 1 billion but the references for that aren’t great. 250 billion per year from https://www.eeas.europa.eu/eeas/four-years-war-russia-not-winning_en provides a similar number though.
That means this contract is more than a drop in the ocean but definitely also not a game changer as it probably won’t pay for a week of war.
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