THE HORMUZ crisis increasingly feels more structural and less transitory, and the global oil deficit continues to ominously build.

The shortfall has recently accelerated due to falling exports from the US Gulf, the Black Sea and Yanbu amid heavily constricted flows via the Strait of Hormuz.

The International Energy Agency slashed its 2026 supply and demand outlook on Wednesday, citing “the ongoing closure of the Strait of Hormuz and elevated fuel prices [that] continue to weigh on oil consumption”.

The IEA now expects global demand to fall by 1.6m bpd in 2026 versus 2025 — 550,000 bpd more than it predicted a month ago. It expects global supply to fall by 4.3m bpd this year, with a drop in 3Q26 that is 1.7m bpd larger than projected last month.

The world economy’s oil “buffer” continues to shrink.

The IEA said that global oil inventories fell by 69m barrels in July, with onshore stocks down by 6m barrels and on-the-water inventories sinking by 63m barrels.

Tanker export volumes fall back to May levels

According to data from Vortexa, as of Wednesday (which is subject to upward revision), seaborne crude and condensate exports averaged 34.8m barrels per day in the week ending August 9, the lowest since the week ending May 31.

During the Hormuz crisis period, global seaborne crude flows have fallen by an average of 4.5m bpd or 11% compared to the same period in 2025.

Last week’s average was down 9% versus the crisis period average of 38.1m bpd and down 18% versus the pre-crisis average of 42.5m bpd (in the weeks ending March 15-August 9, 2025).

Tanker cargo volume declines are entirely focused on very large crude carriers.

VLCC cargo volume has averaged 16.1m bpd in the weeks ending March 15-August 9, 2026, down 6.1m bpd or 27% year on year (y/y).

Last week’s VLCC average was exceptionally weak, at just 12.3m bpd. There was only one week lower in Vortexa’s dataset, which goes back to January 2016: the week ending March 15, at the very beginning of the Hormuz crisis.

In contrast, the average volume on suezmaxes loaded during the Hormuz crisis is flat, up 44,000 bpd or 0.4% y/y, and the volume on aframaxes or smaller tankers is up 1.6m bpd or 19% y/y.

Spot rates remain exceptionally strong

Cargo volume on VLCCs has plunged by nearly a third, yet spot rates, counterintuitively, are around triple levels of a year ago.

The VLCC rate upside drivers: higher tonne-miles due to longer voyage distances and more fleet inefficiencies due to geopolitical disruptions. VLCC rates have been at six figures per day for the past eight months with the exception of a few fleeting dips.

The Baltic Exchange’s US Gulf-China time-charter equivalent VLCC index was at $115,137 per day on Wednesday, the West Africa-China VLCC index was at $104,120 per day, and the Oman-China index — which has a higher risk premium — was at $141,198 per day.

“There is huge money to be had for the risk-takers out there, of which there are not too many for the top prize inside-MEG [Middle East Gulf] load,” said Fearnleys in a market report on Wednesday. “But Fujairah and Oman loads still pay a decent premium and Yanbu-East even more, as the Houthis continue to attack Saudi-controlled ships and installations.

“With a solution of the US-Iran conflict looking increasingly further away, and soaring refinery margins, logic dictates Atlantic eastbound interest will increase going forward, albeit as of now several ships ballasting west on spec have kept a lid on rates,” said Fearnleys.

The suezmax market is now bifurcated between the Black Sea route — which is skyrocketing due to Ukrainian attacks on tankers loading at the CPC pipeline — and everything else.

The Baltic Exchange’s Black Sea-Mediterranean index hit an all-time high of $440,948 per day on Tuesday, surpassing the previous pinnacle reached in the early phase of the Hormuz crisis. As of Wednesday, it was just below the record high, at $438,483 per day.

“September CPC stems are expected to be released imminently,” said Fearnleys. “With rates reaching astronomical levels, owners capable of trading in the Black Sea are likely to prioritise CPC cargoes over adjacent markets.”

Other suezmax indexes are much lower, although still extremely high — and rising.

The Baltic Exchange’s West Africa-North Europe suezmax index was at $101,496 per day on Wednesday, up 44% week on week. The Guyana-North Europe suezmax index was at $94,459 per day, up 29% week on week.

China demand drop continues to offset lost supply

China is the primary reason the global crude deficit has not had more severe economic consequences. China has absorbed almost all of the loss — and has continued to do so in recent weeks.

According to Vortexa data, global crude exports bound for China were down 4.2m bpd or 39% in the weeks ending March 15-August 9 versus the year before, to an average of 6.5m bpd.

Crude flows to China rebounded in late June and early July but have slumped yet again as crude pricing has jumped on renewed Hormuz tensions.

Global crude exports to destinations other than China have averaged 31.5m bpd during the Hormuz crisis, down less than 1% y/y.

The bullish case for tanker rates, particularly VLCC rates, is that China will return to the market in force during the fourth quarter.

“China could now become the next leg of tanker support,” said Clarksons Securities in a client note on Monday.

“Argus expects Sinopec and PetroChina to lift August runs by a combined 610,000 bpd, initially through stock draws, with crude stock draws potentially exceeding 1m bpd in September.

“Chinese purchases of Brazilian crude for October have already risen to 775,000 bpd from 600,000 bpd for September. Higher runs, recovering imports and eventual stock replenishment could drive a meaningful volume recovery into 4Q26 as disruption, route constraints and fleet fragmentation continue to limit effective tanker supply,” said Clarksons.

But the timing of a material import resurgence depends on the extent of China’s reserves — which have been building for years — as well as the base demand of China’s economy. To an unknown extent, pre-Hormuz-crisis Chinese tanker demand was driven by inventory builds, not base demand.

Hormuz supply response is losing steam

The ultimate tonne-mile question for tanker rates is whether the loss of cargo tonnes will eventually offset gains in voyage miles and other trading inefficiencies.

Initially, the crisis spurred strong supply responses from Atlantic basin exporters to replace MEG barrels, as well as MEG pipeline-driven workarounds via Yanbu and Fujairah, and cross-Hormuz strategies such as the shuttle trade to Gulf of Oman ship-to-ship transfer operations.

The latest data shows a stalling trend in the overall global response.

The US, in particular, has played a major role on the supply side, but exports have slackened recently. In the latest week, according to Vortexa data, the US exported just 2.7m bpd of crude, down 41% versus the average weekly volume during the Hormuz crisis. US exports have been declining since early July.

Black Sea exports are being curtailed by the Ukrainian threat to tankers loading non-sanctioned crude from the CPC terminal, as well as threats to tankers loading Russian Urals crude. Black Sea crude loadings averaged 1.8m bpd last week, down 27% versus the Hormuz crisis average.

Tanker traffic continues to pass through the Strait of Hormuz, despite the threat of Iranian attacks, yet flows remain very limited and drastically below pre-crisis levels.

According to Vortexa data, crude exports from west of Hormuz have averaged 3.4m bpd during the crisis period, down 11.1m bpd or 77% y/y.

Crude exports from west of Hormuz averaged 3.7m bpd last week, up 9% versus the crisis period average but still down 74% versus levels in March-August 2025.

Meanwhile, the Houthi strikes on vessels in the Red Sea are having a significant effect on Yanbu. Crude loadings in Yanbu fell to 2.3m bpd last week, down 40% versus the Hormuz crisis average of 3.8m bpd.