The supply outlook is tightening as Iranian loadings remain near zero throughout early August. While floating storage levels persist around 40 million barrels, the lack of new outbound VLCC traffic signals a potential hardening of Tehran’s stance. China’s independent refiners, facing a 35-million-barrel inventory draw in Shandong during July, are expected to intensify competition for remaining Russian and Iranian volumes to sustain current utilization rates.

Simultaneously, the security landscape has deteriorated. The first fatalities from Houthi attacks in the Bab el-Mandeb Strait and strikes on Saudi infrastructure have overshadowed minor production gains from Iraq and Kuwait. As OPEC output climbs to 19.9 million barrels per day, the logistical bottleneck at the Strait of Hormuz remains the primary catalyst for price volatility. With major players like ADNOC acquiring secondary-market tanker capacity and Japan weighing subsidies for alternative shipping routes, the industry is bracing for a sustained period of high-risk maritime transport.