Record diesel prices push Brent toward $95 as Iran strikes hit two Saudi tankers near Hormuz

Diesel hit a record this week and dragged Brent toward $95 a barrel. Brent sets what jobbers and haulers pay at the rack. When the benchmark climbs and diesel climbs faster, the distillate crack widens. Good for refiners, rough on anyone downstream filling a truck.

Hormuz

The reason crude is bid up is the Strait of Hormuz. The US restarted strikes on Iran this week, hitting missile and radar sites along the southern coast and on Larak Island. Iran hit back across the Gulf and into Jordan and kept going after commercial ships. Two supertankers carrying Saudi crude were struck near Hormuz, and two sailors died aboard a Saudi-owned vessel.

Roughly 20 million barrels a day moved through Hormuz before the fighting. Trump says the strait is effectively reopened, with 18 million barrels crossing Tuesday under US protection. No independent source has confirmed that yet. Kpler counted 11 visible commodity-vessel crossings Tuesday, and Lloyd's List Intelligence has logged about 12 transits a day since August. The tracking data is harder to read than usual right now, so treat the 18 million as a claim, not a count.

Saudi crude at risk

Hitting tankers loaded with Saudi barrels is the part that reaches US prices. Saudi crude feeds Gulf Coast refiners, and a real threat to loadings out of Hormuz puts a risk premium into Brent whether or not a single cargo is actually lost. If the strait stays open and traffic holds near normal, that premium could ease. If more ships get hit, it may build.

China calling it

Igor Sechin, the Rosneft CEO and a Putin ally, told a forum in Vladivostok that China has taken over from OPEC as the market's swing buyer. His argument is that Chinese buying through the spring and summer steadied prices and put Beijing in charge of direction. Coming from OPEC's loudest critic, it is self-serving. The underlying point still holds: if Chinese demand is what clears the extra barrels, then how much China buys through this Iran episode matters more than OPEC's next output number.

Venezuela is back in the conversation too, as a heavier grade Gulf refiners could lean on if Middle East supply stays shaky.

What to watch

Watch whether Tuesday's 18-million-barrel claim holds up against the Kpler and Lloyd's counts. Watch whether any more Saudi cargoes get hit near Hormuz. Diesel outrunning crude is the other one, because that crack shows up in your rack price before anything else does.