President Trump has announced a new economic operation against Iran while Ukraine struck two Russian oil sites overnight, adding a fresh risk premium to crude even as a little-known U.S.-run shipping corridor through the Strait of Hormuz keeps barrels moving. Natural gas, meanwhile, holds a narrow range as a Southern heat wave keeps summer demand alive.
President Trump said in a Truth Social post that he had given Iran a chance to reach a deal and that Tehran had failed to take it. According to Trump: "I am announcing the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY". He also threatened economic consequences against any country that helps Iran through cash transfers, currency swaps, or shipping registries.
Ukraine strikes Russian oil infrastructure
Ukraine's military said it hit the Taneco oil-processing plant in Russia's Tatarstan region, roughly 900 kilometers east of Moscow, and separately struck the Tamanneftegaz oil terminal on Russia's Black Sea coast overnight, causing fires at both sites, according to a Telegram statement from Kyiv's General Staff cited by Bloomberg.
A quiet corridor eases some of the pressure
U.S. forces have opened a protected shipping corridor through the southern Strait of Hormuz that now allows 15 to 20 tankers to transit each night, moving nearly 10 million barrels of oil per day, about half of pre-war levels, officials told the Wall Street Journal, CNN, and Axios. American fighter jets are protecting the tankers from Iranian drones and cruise missiles, and officials say recent U.S. strikes have degraded Iran's surveillance of the corridor.
U.S. crude output and stockpiles
The EIA's weekly report for the week ending August 14 showed U.S. crude production rose to 13.830 million barrels per day, up 25,000 barrels from the prior week and 448,000 barrels above a year earlier. Crude exports jumped 1.008 million barrels per day to 4.066 million, while commercial crude stocks, excluding the Strategic Petroleum Reserve, rose 4.4 million barrels to 428.8 million. The SPR fell 5.3 million barrels to 293.4 million, and total crude inventories edged down 0.9 million barrels to 722.2 million, still 101.9 million barrels below year-ago levels.
Natural gas holds its range as heat lingers
Natural gas futures traded around $2.75 Wednesday morning, off about 2% after a jump to $2.814 a day earlier, as extreme heat warnings covered North Texas, where Dallas-Fort Worth hit 105°F, and Houston neared 100°F. Last week's EIA storage report showed an injection of 36 Bcf, taking working gas to 3,153 Bcf, which is 198 Bcf above the five-year average but 25 Bcf behind last year, and analysts expect this week's build to come in smaller, around 13 to 18 Bcf. Production remains near record levels above 111 Bcf/d in the Lower 48, with LNG feedgas running around 17.2 Bcf/d.
Source: Investing.com
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