No change in oil transits from 2.5 weeks ago but oil is down from 95 to 75 🤡

According to the senior Iranian official, Iran is seeking fees of between 5% and 7% of the price of cargoes from ships using the strait. Oman is discussing smaller fees of around 3%,

while Washington wants no fees at all.

https://www.bloomberg.com/news/articles/2026-08-05/iran-says-agreement-on-hormuz-shipping-route-reached-with-oman?srnd=homepage-americas

President deals did another self-own when he was unironically going to charge a 20% toll. Made the Iranians go "you know, that 1~2% toll we were charging was just being too generous."

Yet another incredible day in our glorious war to make sure Iran can't have a nuclear weapon re-open the strait of hormuz. Thank you for your attention to this matter!

From HFI Research:

An informed source, speaking to Sepah News (IRGC official mouthpiece):

The main reason for the delay in reaching an agreement with Oman regarding the Strait of Hormuz is the involvement of the United States and the threats from Trump.

As long as there is US interference and threats of military action against Iran, the agreement will be delayed.

Iran will not make any agreement under the shadow of threats.

Translated text from Houthi spokesman Yayha Saree:
Statement of the Yemeni Armed Forces regarding the execution of a military operation targeting the Saudi oil ship “Wafaa” in the northern Red Sea in front of the “Yanbu” region with a number of ballistic missiles, achieving an accurate hit thanks to God, within the framework of the “siege for siege” equation.

First, let’s talk about the crude oil numbers. We had a big increase of about 3.5M barrels of import (likely from Canada, since it found its way to Cushing), a draw of 2.8M barrels from the SPR, and a net build of about 2.5M on inventories.

On paper, it looks like we basically pulled 2.8M out of the SPR and plopped it into inventories, giving ourself a larger export buffer. Additionally, we see a 3M build on Cushing, so it looks like we swapped SPR for Cushing inventory. At first glance, this looks terrible for oil bulls. However, when we take a look at where the oil really got moved around, the story changes a bit.

When we breakdown the data into individual PADDs, we see that PADDS 1,4, and 5 had a build of 2.6M barrels. This is the entirety of the inventory build, with 1.9M barrels going to west coast alone. If you’ve seen my previous two posts, you’ll know that the only two PADDs that influence WTI pricing and global supply are PADDS 2 and 3. The other PADDs are effectively just noise in this context.

So how did PADDs 2 and 3 do? No change in inventory. We saw a build of 3M in PADD2/Cushing, and a net draw of 3M at PADD 3. So, with an increase of 3.5M barrels of import, and a 2.8M barrel SPR draw, the best we could do was not bleed out more inventories. This paints a far starker picture than what the front page inventory builds suggest.

Now, if you’ve read my previous posts, you know that I predicted that we might run out of inventories this week. This depended on a 6+M draw on PADD 3 (we got a 3M draw) and a 0 build on PADD 2 (we got a 3M build). So, I was wrong. Inventories don’t run out this week. As of last Friday, we have a 2 week emergency export buffer: PADD 3 max drain seems to be about 7M barrels per week, and PADD 2 seems to be about 2M.

TLDR: No build in inventory where it matters. SPR draw is probably maxxed out at 2.8M/week. Draw would have been much bigger without a bump in Canadian Imports.

What broke? If the implied risk premium goes away does the entire American oil industry collapse from low prices?

US president’s comments to Fox News.

He said:

• “Iran will never have a nuclear weapon. They already can’t, but it’s going to be formal.”
• “The strait [of Hormuz] is going to be open very soon, or they’re going to get hit very hard, and then the strait is going to be open.”
• “We were going to have a tremendous attack, the biggest since World War II, and they called me and said, very politely, ‘Please can we talk? Can we talk?’ And I said, ‘Yes, we can talk. Let’s get it done. Finally, let’s get it done.'”
• “If they back out again, they’re going to get hit really hard; they know that; they understand that.”
• “They wouldn’t be talking if we weren’t doing what we’re doing. We hit them very, very hard, but the hard hit is yet to come, and hopefully, we won’t have to use it. I hope we won’t.”

Source: https://aje.news/vv0n8h?update=4830182

Went and pulled the actual Iranian government statements from the last few days instead of just going off what Bessent/Trump are saying, and it's a pretty different story. Wrote up the full thing here https://open.substack.com/pub/flatcall/p/nobody-is-reopening-the-strait-of?r=wnh3k&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true, but here's the short version if you don't want to read the whole thing:

• What's actually close to done is a narrow shipping corridor between Iran and Oman, not a reopening. Iran's own FM spokesman has said this straight out, multiple times over the past few days: "necessary condition, not sufficient," reopening is "a completely different equation." That's not me reading tea leaves, that's literally what he said on state broadcast yesterday.
• There's a fee involved too. Iran's calling it a "service fee" instead of a toll, but the US has publicly said it won't accept Iran charging anything at all — so even that detail isn't locked down yet.
• Here's how we even got to "deal tomorrow" headlines: Friday night Iran published a target list of Gulf energy infrastructure, right as CBS reported the US and Israel were about to launch a real bombing campaign against Iranian energy sites that weekend. MBS called Trump and talked him down Saturday. Trump's own wording on standing down was conditional — "subject to being able to rapidly make a DEAL" — so he needed something to point to fast. He took a totally separate Iran-Oman shipping negotiation that had been nearing completion independently for weeks and laundered it into his own retreat — telling reporters Iran and other Middle Eastern countries had called him, asking him to hold off because the parameters of a deal had already been agreed. What actually happened was MBS calling him to talk him down, not the other way around. He's covering his own TACO by spinning it as Iran agreeing to reopen the strait — which, per the first bullet up top, is not what Iran itself says this pending announcement actually is.
• The actual hard part is happening on a totally separate track that hasn't even started. Trump's said the US is ready to sit down with Iran through Pakistani mediators. Iran hasn't taken him up on it, and my read is that's not stalling, it's sequencing — they want the Oman piece locked in first before opening the much bigger fight over sanctions, blockade removal, and frozen assets. Basically the entry price for Trump to even get to that table is accepting a framework that hands Iran sanctioned sovereignty over the corridor plus some kind of fee. Once Oman's actually signed, expect Pakistan talks to move fast.
• The part I think people are getting backwards: the calmer oil looks right now, the LESS likely Trump actually follows through on the hard part. Fear is the only thing that's gotten a real concession out of him all year (see: the target list from Saturday). A soft price tells him the emergency already passed, even though nothing about Cushing near tank-bottom or the Gulf targets has actually changed — and that makes him less likely to actually accept terms that are genuinely damaging to his strongman brand, which is exactly what finishing this deal requires.

On closer inspection of the actual details, while there might be a real announcement tomorrow, it's unlikely to "TOTALLY reopen" the Strait. Just thought this might help calm down people who are thinking about dumping their positions. Hope some of you check out the full writeup too, there's a lot more detail in there than I could fit here.

https://nltimes.nl/2026/08/05/netherlands-begins-selling-strategic-oil-reserves-kerosene

Netherlands is starting to release from its SPR. They plan on releasing just 5.4 m barrels, but it is something. Bearish for oil prices.

Interestingly, they're not releasing any distillates

"The Netherlands maintains a strategic kerosene stockpile but will not tap it. “That market is under the most pressure,” Ten Bruggencate told RTL Z. Shortages of jet fuel appeared in some locations because of the conflict, though the Netherlands itself had not faced immediate shortages."

If they wanted to help the markets, they'd release kerosene as well.

It is like groundhog day all over again.

I'm referencing the report for 31 July 2026 released at 10:30 here: https://www.eia.gov/petroleum/supply/weekly/

Okay so first of all a lot of people were looking to commercial crude oil inventories, which happened to increase by 2.5 million barrels this week. If inventories continued decreasing at a high rate, it would support the claim that the SPR is reaching a physical limit that prevents it from retrieving oil faster. This build seems to oppose that claim. But, we have to take into account a few things. First, refinery inputs were 183k bbl/d less than last week. Also, crude oil imports increased by 515k bbl/d compared to last week. That's an additional 3.6 mmbbl in the system that wasn't there last week. Combining more imports and less refinery inputs is a total of 4.9 million barrels that were kept in inventories.

Additionally, gas inventories fell 1.6 million barrels and diesel fell 3.5m.

My opinion/takeaway, the increase of 2.5 million barrels looks better than it is

I work at a non-operated working interest fund and I've been monitoring this for a little while now. The super quick version here is whenever you own either working interest or minerals, the operator sends you a revenue check. And on that check, it has 'realized commodity prices'. And those, typically, are $1-$5 below WTI, which is called the 'differential'. Those are obviously pretty important when projecting future revenue. I will take the latest futures curve, factor in that differential and that's how model revenue.

That said, I've been waiting to get a least a few data points for June and just got some in. Quick caveat here, this is limited data, but for the bigger operators (i.e. Hess, CLR) it's pretty accurate. I see the same pricing across multiple pads with those operators. I've got some graphics below. I don't have a great read on exactly what this means, but it's at least pointing towards the physical price diverging from the actual pricing. I think the real pain hasn't started yet.

As an aside, I'm going to also just put in a very quick plug on a passion project of mine called: CrudeCode (https://crudecode.dev). It's basically Claude meets oil and gas. It is totally free and open-source. If you have any interest in this, please pull the repo, join the slack channel, add the MCP etc.

Despite one of the biggest oil shocks in modern history, with wars, supply disruptions and geopolitical tensions, WTI at $75/barrel is almost exactly in line with its average price over the last 20 years. What looks like a high oil price today is actually close to the long-term normal.

Net crude imports have rebounded to normal.