The collapse of a tentative ceasefire, which had sparked optimism for increased supply earlier this summer, has left energy markets reeling. Tanker throughput through the Strait of Hormuz has stalled, mirroring the restricted movement that plagued the region in May. Compounding the logistical nightmare, Houthi threats to blockade the Bab el-Mandeb Strait now imperil Saudi Arabian exports, a critical alternative route that Asian buyers relied upon during previous disruptions.

Chinese refiners, already grappling with domestic demand issues, saw processing volumes drop to 2020 pandemic-era levels in June. While global counterparts in the U.S. and Europe remain near capacity, Asian operators face a starkly different reality. Scheduled loadings for July and August are in disarray, forcing executives to walk back projections for increased throughput. As supply chains fracture, the expected recovery in fuel production appears increasingly unlikely, threatening to tighten global energy markets further.