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Posted on 09/16/2026 3:14:17 PM PDT by MinorityRepublican
Crude oil prices dropped Wednesday as the Trump administration tried to reassure the market that Saudi Arabia's damaged East-West pipeline will restart operations in days.
U.S. West Texas Intermediate futures shed 3.2% to close at $102.43 per barrel. Brent crude, the international benchmark, lost 2.7% to settle at $105.83 per barrel. Prices have rallied more than 16% this month as fighting has sharply escalated in the Persian Gulf.
U.S. Energy Secretary Chris Wright told CNBC on Tuesday that the pipeline outage is a "brief and temporary interruption" that "will be measured in days."
But independent analysts warned the pipeline could remain down for weeks based on satellite images showing significant damage to a pumping station.
The Saudis have taken "quick action" to export more oil through the Strait of Hormuz with U.S. military help while the pipeline is down, Wright said.
Four supertankers that can carry 8 million barrels total were observed loading at Saudi Arabia's Persian Gulf ports of Ras Tanura and Juaymah on Tuesday, said Matt Smith, director of commodity research at Kpler.
"They are likely going to be part of the shuttling effort via the Omani route through the Strait," Smith said.
Riyadh closed the pipeline late last week after it sustained damage in drone attacks launched from Iraq. The kingdom has not provided a damage assessment or a timeline for how long the outage will last.
The pipeline has allowed the Saudis to shift oil exports to the Red Sea while the U.S. and Iran battle for control over Hormuz. The strait was the Gulf states' main export corridor before the war.
(Excerpt) Read more at cnbc.com ...
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The check is in the mail.
Check to whom for what. Saudi Arabia is a great nation.
In recent years the gas price at the pump suddenly went up due to world news stories. By dawn. Even though the gas in the stations’ huge tanks underground, on distant trucks on the highways and not refined yet wasn’t actually more expensive to the corporations.
BUT....good news such as abundant supplies and so on meant: “But that doesn’t mean you and I will see any drops in gas prices at the pumps. It takes transportation of oil, refining into light, sweet crude and finished and transported gas, so it may take 3 or 4 months for a slight drop in pump prices.”
Same price in 2022. Gas was well over $5 and more. Remember the Biden stickers “I Did That”.
27% inflation in 4 years during Biden. Those don’t come down quickly.
In 2008 oil prices were $147 per barrel.
The economy sucked.
Today people complain over the dumbest things with no memories.
Now the usual suspects will show up and complain that the Saudi leader is directing U.S. foreign policy like they complained about the Israeli leader ... or will there be significantly fewer complainers ?
Gasoline is private property. The owners can sell it for any price they choose. Or maybe the government people should just take it and set their own price ...
Oil prices fell, but pump prices went up-and are staying there. People are paying it and they want to influence the mid-terms. Never mind that diesel price is due to Ukraine/Russia, not Iran. Saw a Love’s truck stop on I-81 today, Credit price for diesel:$7.15
In the 70s there was rationing. Could you imagine that today?
The recon photos of the pumping station showed a lot of damage. It looks like a total loss. Lots of replacement equipment is needed. It didn’t look like just “weeks” to get it back online.
A big problem in the general thinking that too few people understand that the open market commodity prices are based on *futures* contracts.
There are proxies upon proxies - but if you want some near-term advice for your personal wallet? Fill up today. Fill up everything.
The next couple weeks are going to be ugly, regardless of what the daily commodity futures prices do.
> Saudi Arabia is a great nation. <
There were 19 hijackers on 9/11. 15 were Saudis.
That’s way more than just a coincidence.
Something is very wrong behind the scenes in that country.
On the other hand, if the House of Saud falls something much worse will take its place. So there’s that.
Democrats are outraged.
Global diesel supply is extremely tight in September 2026: record cracks ($84–$108+/bbl), critically low stocks, and high prices. Diesel is a refinery middle distillate. The binding constraint is refining and logistics, not crude alone.
Iran war and Hormuz. Since about February 2026 the Strait of Hormuz has been severely restricted. Gulf diesel/gasoil seaborne exports collapsed (at times ~390 kb/d). Combined Middle East product losses are about 2 million b/d. Regional refinery runs are ~2 million b/d below 2025; pre-war recovery is not expected before late 2027. Crude bypasses exist; most product still needs tankers.
Russia–Ukraine. Ukrainian drones have cut Russian refining. Moscow banned diesel exports (extended at least through October 2026) to cover domestic shortages. Russia was the No. 2 seaborne diesel exporter; the ban removed on the order of 1 million b/d / ~10% of waterborne diesel. Executives cite ~2 million b/d of missing products from Russia and ~2 million b/d from the Middle East.
China. Second-largest refiner. Passenger EVs mainly displace gasoline, not diesel. China’s diesel drop is commercial: a long property and construction slump (less site work, mining, and mixer/excavator hours), weaker industrial freight intensity, and substitution in heavy trucks. LNG trucks and battery heavy-duty vehicles now take a large share of new HDV sales; Kpler estimates LNG plus new-energy heavy trucks displace on the order of 500–680 kb/d of diesel in 2026 even as road freight ton-km still grows. High retail diesel prices after Hormuz sped that fleet shift. Beijing curbed product exports early in the war, later eased them. Mid-September diesel stocks hit a 15-month low, raising risk of new Q4 export limits. Independent refiners also lost cheap Iranian crude.
India. Third-largest diesel producer. Complex plants running 105–108% and prioritizing diesel. India is a swing exporter to Europe (via Bab-el-Mandeb), Africa, and Brazil, filling gaps left by Russia and the Gulf. Export levies are adjusted fortnightly. Strong domestic use (trucking, farms) caps how much can leave.
Venezuela. Heavy, sour grades (Merey, Orinoco extra-heavy) are not simple distillates; they feed complex cokers and hydrotreaters. That slate yields more residual feedstock for delayed coking, which U.S. Gulf Coast plants use to maximize diesel—especially after Middle East heavy residues were cut off. U.S. imports of Venezuelan crude have jumped; Venezuela is again a top heavy-feed supplier to PADD 3. Crude output is about 1.2 million b/d. Chevron has committed more than $7 billion over five years to more than double its JV output to ~600,000 b/d; Washington is pushing a much larger investment wave. That path can raise diesel made from Venezuelan crude in existing complex refineries. It does not yet make Venezuela a large seaborne diesel exporter: domestic plants run near ~30% of ~1.3 million b/d nameplate, need an estimated ~$20 billion and years to restore, and current capital is aimed at wells first. Near-term diesel effect is feedstock to U.S. (and some Asian/European) conversion units, not PDVSA product cargoes.
Refining capacity. Spare capacity is essentially gone: U.S. ~97–98%, India over 100%, Europe near multi-decade highs. Global runs are millions of barrels per day below last year. High diesel cracks shift yields toward distillate, but there is little unused kit. Hard running raises outage risk. OECD closures and slow non-OECD additions do not offset Gulf and Russian losses.
Pipelines and chokepoints. Saudi Petroline (Abqaiq–Yanbu) has a nameplate of ~7 million b/d and had been moving ~4–5 million b/d of crude to the Red Sea as the main Hormuz bypass. Drone strikes on 10 September 2026 damaged pumping stations (reports cite stations 8 and 9); the line shut from 11 September. U.S. Energy Secretary Chris Wright called the outage a brief interruption and said flow should resume in days. Independent analysts, citing satellite images of fire damage and a large burn scar at a pump station, warn repairs could take weeks: Kpler sees ~50% capacity for up to six weeks and 2.5–2.7 million b/d less Yanbu exports; others say four to eight weeks, and some say months if spare parts are scarce. Aramco is reported to be bypassing a damaged section for a possible partial restart, with full capacity later. Yanbu tanks were said to cover only five to seven days of exports. UAE Habshan–Fujairah still moves crude outside Hormuz. Red Sea/Houthi risk remains. Diesel is still mostly seaborne.
2026 Atlantic hurricanes — a rare tailwind. Through mid-September the basin had five tropical storms and zero hurricanes, the latest first-hurricane date in the satellite era, under a strong El Niño. Arthur, Bertha, and Edouard affected the Gulf Coast but did not force prolonged refinery shutdowns. The U.S. Gulf holds about half of U.S. refining capacity and a large share of diesel output and exports. Those plants were already maxed out. A major landfalling hurricane would have removed large distillate volumes with inventories already lean. The season is not over (late September–October still matters), but the lack of a destructive Gulf hit has been one of the few supply blessings this year.
Other balances.
Tightness is expected through winter 2026–27 unless Hormuz, Petroline, and Russian product flows recover. Until then the system has almost no slack.
It’s the sheer incompetence that ticks me off.
The Saudi defense budget - both in raw dollars and GDP percentage - is bigger than anyone else around them excepting Israel.
I don’t disagree - whatever might replace them would be exponentially worse, but how can they be so incompetent?
On a personal matter - my defense stock holdings are glad they buy so much, but yeesh...
They’ve EASILY got the most modern and largest air force in the ME outside of Israel. AND they’re an absolute monarchy.
And they can’t deal with a bunch of desert militia riding around in modified toyota pickup trucks with mounted machine guns!?!?!
Yeah, yeah - I’m well aware the Iranian mullahs are supplying the houthis with third rate drones and explosives but come on.
It’s a completely ridiculous level of incompetence.
> It’s the sheer incompetence that ticks me off. <
I once read an article about one of the Gulf Wars - I forget which one. The author said Saudi pilots and air traffic controllers simply would not communicate with female members of the American military. It was beneath their dignity.
I dunno. Perhaps part of the Saudi incompetence is that they are 8th century thinkers with 21st century toys.
Side story: I once had a business dealing with two Saudi men. The deal went well. But they treated me (an infidel man) as they would treat a mildly retarded person.
I kept my temper. But it was not a pleasant experience.
“measured in days”
I hope this reverses what we saw here locally today: The gas stations that were at $3.61.9 this morning, for 87 octane “regular”, jumped to $3.99.9 this afternoon.
$4.14 at the pumps today here in FL
Repubs gonna get ass raped at the polls
Voters are notorious for short memories. They only remember gas prices from 6 months ago at the most.
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