Newsletter · 2026-09-25 · Ashutosh Agarwal

Crude Slides on Iran Talks as Diesel Ban Fight Splits Washington - Oil: OPEC+, Shale & Geopolitics - Week of September 25, 2026

Oil: OPEC+, Shale & Geopolitics for the week ending September 25, 2026. Podcast synthesis on US-Iran talks over reopening the Strait of Hormuz, crude's five-day slide, the White House fight over a diesel export ban, China's spare refining capacity, Russian refinery strikes, and Treasury yields at 20-year highs.

Oil: OPEC+, Shale & Geopolitics

Week of September 25, 2026: Crude Slides on Iran Talks as Diesel Ban Fight Splits Washington

Iran put a plan to reopen Hormuz on the table, then said it can wait until after the US midterm elections. Crude slid for a fifth day anyway. Meanwhile Washington is fighting with itself over banning diesel exports.

This week the Iran war moved into diplomacy, at least on the surface. US and Iranian envoys talked through go-betweens on the edges of the United Nations General Assembly in New York. Iran's foreign minister confirmed that Tehran had sent a proposal for reopening the Strait of Hormuz. President Trump called the talks "very good" a few hours after threatening, from the UN stage, to "annihilate" Iran. Crude oil fell for a fifth straight day. US crude (West Texas Intermediate, or WTI) closed Tuesday at $94.99 a barrel, and Brent, the global benchmark, sat right around $98–100.

The catch is that Iran's terms have not moved, and Iran says it is happy to wait. As CNBC summarized the foreign minister's statement, Tehran understands Washington "might need to wait until after the midterm elections" and is "prepared to wait it out." President Trump offered his own timeline: "I believe we'll make a deal right after the election." That means the two sides agree on one thing, which is that nothing big happens before November 3.

Three other stories ran alongside the talks:

• The Trump-Xi summit delivered a two-month extension of the US-China trade truce, and very little else. Oil was the backdrop to the summit, not an agenda item.
• The diesel export ban split the administration in public. The President backed it. His Energy Secretary called it "the blunt tool" that "definitely does not work," and the oil industry, farm groups and big business lined up against it.
• The bond market sent the 10-year Treasury yield to a 20-year high. High oil prices and talk of more Federal Reserve rate hikes were a big part of the reason.

As always, we keep the insiders apart from the commentators. This week's insiders include a former CIA Middle East officer, a retired Navy admiral, the head of the American Petroleum Institute, Bank of America's head of commodities, Morgan Stanley's oil strategist, China energy researchers at Columbia and Oxford, BloombergNEF's gas analysts and a former Dallas Fed president. The pundits and forecasters are labelled as such.

1. The talks are real. So is the gap.

What happened. On Bloomberg Daybreak: US Edition (Sept. 23), Bloomberg's Middle East correspondent Abir Abu Omar (reporter) laid out the first round. Trump's envoys Jared Kushner and Steve Witkoff talked with mediators, "namely Qatar," for about three hours, and more sessions are planned. Iran's side then restated its conditions for reopening the strait:

• The US immediately lifts its naval blockade of Iranian ports
• Frozen Iranian assets are released
• Oil sanctions are removed
• The war ends "on all fronts"

"It sounds like a similar position that we've heard for the last few months," the host noted. Abu Omar agreed: "100%. We keep going back and forth." She found one hopeful sign. Foreign Minister Abbas Araghchi was leading the talks in person in New York, which "sends a pretty strong message about Iran also possibly wanting to find an off-ramp just as much as the U.S. wants an off-ramp ahead of those very essential midterm elections."

The proposal. On CNBC's Fast Money (Sept. 24), White House correspondent Eamon Javers (reporter) relayed two developments:

• Reuters reported that US and Iranian negotiators are "exploring a phased deal to reopen the Strait of Hormuz and end the U.S. naval blockade," and that "China may end up being a key power broker in those talks."
• Araghchi confirmed "the Iranian side has made a proposal for reopening the Strait of Hormuz to the U.S. side, and they're waiting for a response."

Javers added that Tehran "is not in any rush." The President, for his part, "has said he believes the Iranians are stalling until after the midterm elections."

How the price reacted. The first real price move came earlier in the week. On Saxo Market Call (Sept. 22), Saxo Bank's head of commodity strategy Ole Hansen (analyst) broke into a pre-recorded show. A Japanese news agency was reporting that "Iran has informed the Trump administration that they will reopen the blocked Strait of Hormuz within seven days if it accepts demands such as lifting the U.S. military blockade of Iranian ports." Brent dropped "briefly below $99." Hansen read the offer as a possible sign that pressure is working on Iran: oil is leaving the strait "in increased quantities," Saudi Arabia "has quietly been telling refineries in Asia that they will be ready to export again," and "Iranian ships are not leaving the Strait because of the blockade."

On Grain Markets and Other Stuff (Sept. 23), the hosts put numbers on the slide. WTI fell 1.2% to $94.99, "its fifth consecutive day of declines." Regular gasoline averaged $4.47 a gallon and diesel $6.52. Their explanation: "there is some talk between the U.S. and Iran" and "an imminent restart of a critical Saudi pipeline." They also passed on the standard warning from analysts that if the war drags on or infrastructure takes more damage, "crude prices could climb to $120 to $150 per barrel."

Two numbers that don't match. At the UN, President Trump said "the United States Navy has recently escorted more than one billion barrels of oil out of the Strait of Hormuz," with "22, 25, 30, 32 and 37 ships out respectively every single day." But as The David Lin Report (Sept. 24) pointed out, Reuters' preliminary shipping data "recorded just three commodity vessels passing through Hormuz on Tuesday below the 10-day average of about 15." Reuters cautioned that the count may be revised "because some ships switch off their transponders" (the tracking beacons ships broadcast).

2. Why the security experts don't expect a deal soon

The most thorough case for patience, and for skepticism, came from two career insiders. On NatSec Matters (Sept. 23), host Michael Allen of Beacon Global Strategies interviewed Norman Roule, a former CIA officer who spent most of his career on the Middle East, and retired Navy Admiral Mark Montgomery of the Foundation for Defense of Democracies.

Roule on Iran's demands. Roule said Iran's negotiating style has not changed since 1979: "they show up to talk… But that doesn't mean they have anything to say." He listed "four consistent demands" that no one in Tehran has dropped:

• Control of the Strait of Hormuz, which gives Iran leverage "not only to control the Gulf economies, but the global economy, as well as the fiber optic cables" that run under it
• Reparations
• Continued militia presence in Lebanon, Yemen and "most troubling… Iraq"
• "The removal of U.S. forces from the region"

"I would love to hear the suggestion," he said, "on how we… what concessions we make to the Iranians on those four points." Montgomery drew the parallel to Russia and Ukraine: "the Russians have never come off their maximalist terms like the IRGC has," referring to Iran's Revolutionary Guard, the military force that holds real power in Iran.

Is Iran feeling the pressure? Roule answered "a firm yes" to all parts of the question. His evidence is that Iran's rulers are worried about unrest at home. They have put a hardline intelligence officer in charge of the Basij militia and are organizing neighborhoods into informant "committees," which he called "unprecedented in the history of the Islamic Republic." At the same time, Tehran still has to "show they have that capability to conduct violence across the board." That means "intermittent attacks on shipping in the Gulf and the Strait of Hormuz," and pushing its allied Houthi and Iraqi militias. His verdict: "this will continue for a while."

Montgomery on how oil actually gets out. This was the most useful explanation of the week. It is not the old-style naval convoy. The US Navy is providing "guidance and control to shipping": setting timing and routes, clearing a mine-swept lane along the Omani coast, and keeping "an unblinking intelligence eye overhead" with aircraft that can knock down drones and missiles. Merchant captains get "very generic information… go 070 for 22.2 miles… Do not leave this lane." Smaller tankers carry "100, 200, 500,000 barrels" each out to supertankers waiting outside the Gulf. "Six or seven 2 million barrel carriers a day" would, together with Saudi and UAE pipelines, get flows "close to… pre-war levels." Roule's conclusion: Hormuz is now "a diminished asset" for Iran. "They can still impose some ability to contest that. They just can't control it."

Schachter: a war premium, and a timeline into 2027. Josef Schachter of Schachter Energy Research Services, a 40-year energy veteran (analyst), told The David Lin Report that he does not expect a deal right after November 3. "The politicians… in Iran probably want to do a deal. But unless the mullahs and the IRGC agree, then there's no deal… the IRGC just wanted control of the straits. They want to get paid for it." His base case is "into 2027 at the best," possibly with a Hormuz "toll, a service fee… whatever Iran and Oman come up with." He credited the Navy escort system with keeping crude from "$120 a barrel right now." And he estimated where oil would trade without a war: "we should be maybe in the mid 70s" in the autumn shoulder season (the quiet stretch between summer driving and winter heating), then rising toward today's levels "in the depths of winter." The difference between that and today's price is the "war premium," driven by insurance costs and the risk of attack.

The Gulf states disagree with Washington. On CNBC's Power Lunch (Sept. 24), co-host Kelly Evans (reporter) shared what she heard at a UN-week event held under Chatham House rules (comments can be reported but not attributed to anyone): "those whose interests are with the Gulf have no interest in Iran having any remaining control over the Strait of Hormuz. The Americans seem to think that some sort of Gulf-Iran joint oversight is a pragmatic outcome and they are steadfastly against this." Her takeaway: "I'm not sure how we do this then."

On the same show, Hayman Capital's Kyle Bass (investor and commentator) argued the real pressure point is money. Iran's oil sales are settled in Chinese yuan and run through "cash houses around the world," and Treasury is "closing down those avenues." Bass said Iran's currency is "hyperinflated," that the next step is going after Revolutionary Guard money held "in U.K. banks… Kuwaiti banks… UAE banks," and that "we won't leave without that highly enriched uranium," about "900 pounds" of it. His advice on headlines between now and November: "I wouldn't trade on it."

Haass: the worst case hasn't happened yet. On CNBC's Closing Bell (Sept. 23), veteran diplomat Richard Haass (former official, now commentator) framed the stakes. The US "is going to have to make some tough decisions about what kind of compromises it's prepared to make in order to get the Strait of Hormuz open." Saudi Arabia faces the same choice with the Houthis to reopen the Red Sea. Then his warning: "90 percent or more of the energy infrastructure in the Middle East is still intact. If that were to change… then we're looking at a global recession."

The escalation scenario. On Macro Voices (Sept. 24), Rabobank global strategist Michael Every (strategist) said he expects more military action, "the U.S. and Israel and a coalition from the GCC to try and really finish the job." Host Erik Townsend asked whether a big pre-election military push is possible. Every chose his words carefully: "serious people who take this matter seriously are having serious discussions about the serious likelihood of that happening."

3. The Trump-Xi summit: a short truce extension, and Iran in the background

The summit's one concrete result was announced by Treasury Secretary Scott Bessent on Fox News and replayed on Bloomberg Daybreak: US Edition (Sept. 24): "We will extend what we call the Busan Agreement, the economic detente between the two countries that was scheduled to end on November 10th. That is going to be extended until January 10th." That is shorter than either side wanted. US trade officials had floated three to six months, and China wanted "up to a year or even longer." Chatham House associate fellow Lindsay Newman (analyst) said the short window "plays very much to the U.S. hand." It lets Trump "get through the midterm elections… and see also as the new Congress takes office" before deciding where his leverage is.

Where oil and Iran fit in. The best explanation came on BBC's Business Daily (Sept. 23) from Laura Cress, the BBC's senior China correspondent (reporter):

• China's economy is weak, and the war is making it worse. China has "vast resources of crude oil, but they are going through them very quickly."
• Beijing has had to raise domestic fuel prices, adding "20 to 30 percent on textiles and on plastics" for businesses running on "a margin of maybe one to two percent."
• Her read on Beijing's offer: "We will lean on Tehran if you do not send any package of arms as promised to Taiwan."
• Her BBC colleague Samira Hussain noted that China buys "a majority of Tehran's oil," so Washington wants Beijing "to act as some kind of mediator."

The size of China's cutback. On CNBC's Fast Money, Eamon Javers showed that China's imports of Iranian oil fell "from 1.4 million barrels a day to 534," which he said was August's level. "It has not eliminated them altogether. That's an important point." In the same segment, Safanad chief investment strategist John Rutledge (commentator) called it "the Rodney King summit… why can't we all get along?" and made the week's bleakest claim: "Iran is not going to be solved. Iran is now a permanent tax collector for the Straits of Hormuz."

The critics. Richard Haass (Closing Bell) worried the only way the summit could "accomplish a lot" was if Trump traded "geopolitical interests in exchange for certain commercial interests." He pointed out that the US has "already put an indefinite hold on our arms supply of Taiwan." He wanted Trump to "push China hard on its support for Iran." Former US trade representative Michael Froman, now president of the Council on Foreign Relations, told Bloomberg Surveillance (Sept. 24) that expectations were "very low." He expects talk of "Chinese purchases of agriculture products, energy products," while noting Beijing "hasn't followed through on some of the previous commitments."

4. China: the oil shock that wasn't, and the refinery capacity it isn't using

If there is a hidden release valve for the world's fuel shortage, it may be in China. Two podcasts this week, one from academics and one from an industry research firm, explained why.

How China absorbed the shock. On Columbia Energy Exchange (Sept. 22), Erica Downs of Columbia's Center on Global Energy Policy and Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies (both researchers), explained how the world's largest oil importer got through the loss of Gulf oil without a crisis:

• China cut crude imports in the second quarter "by about 30 percent, or 3.5 million barrels per day," split roughly between drawing on stockpiles and running its refineries less.
• Measured from February to April or May, "it's close to 5 million barrels a day that declined," Meidan said.
• The most surprising part is how little of its emergency stockpile China used. "The highest estimate that we could come up with, and I'm being very generous here, is that they may be tapped into 100 million barrels out of reserves that are estimated at anywhere from 1.1 to 1.4 billion barrels. So a drop in the ocean."
• The reason China held up: "oil is 20% of China's energy mix… 85% of China's energy supplies come from domestic sources, coal, nuclear, hydro, renewables."
• Beijing capped how far fuel prices could rise but did not freeze them, and "there was greater EV use… greater use of subway and rail."
• The long-term takeaway: "Both Sinopec and CNPC, the two largest oil companies in China, are saying that oil demand more broadly has peaked. And so to a certain degree in the Chinese thinking, oil is yesterday's story."

China's spare refining capacity. The RBN Energy Blogcast (Sept. 23), written by RBN analysts Jason Lindquist and John Auers (industry analysts), looked at whether China could send more gasoline and diesel to the rest of the world. Beijing controls how much fuel leaves the country through export quotas (official limits on how much each refiner may ship abroad):

• China cut net fuel exports "to less than 400,000 barrels per day" after Hormuz closed.
• It relaxed the limits in July, and exports "exceeded 1 million barrels per day in August," with September "in the same range."
• China's refineries have run at only about 80% of capacity since the pandemic. Doubling exports "would only require total system utilization to increase to very achievable levels in the mid-80s percent," taking net exports "to 2 million barrels per day or more."
• The conclusion: "The question is not whether China has the barrels, but whether Beijing decides it wants to supply them."

The American Petroleum Institute is making the same case in Washington. Its president Mike Sommers (industry insider) told CNBC's Squawk on the Street (Sept. 24): "We have a giant Chinese delegation here in town, and we estimate that they have about 1.5 to 2 million barrel a day refining capacity that is currently offline. So we should work with our allies, not just in China, but in Europe as well, to get more product online as quickly as possible."

China is starting to buy again. Bank of America's head of commodities research Francisco Blanch (analyst) told Squawk on the Street (Sept. 22) that China has been "bringing down their inventories about 10 percent in the past six months. And now they're starting to come back into the market." He said that is one reason Asian crude prices have climbed "quite a bit in recent weeks." How much? On The Great Simplification (Sept. 23), host Nate Hagens (commentator) put the price at "$135 a barrel" in Shanghai.

5. The diesel export ban: the President is for it, his cabinet is against it

Diesel stayed near its record, at $6.52–6.53 a gallon nationally and $8.42 in California, per Grain Markets and Other Stuff (Sept. 22). The policy fight is the new part.

Who is on which side. On Sept. 22, President Trump said he supports banning US diesel exports. A day later his own team split in public. Per Reuters reporting relayed by Jim Wiesemeyer on AG Bull (Sept. 23):

• Energy Secretary Chris Wright: "The blunt tool of banning diesel exports definitely does not work."
• Interior Secretary Doug Burgum had already warned, in mid-September, that countries hit by US restrictions could cut their own shipments in return, "exposing import-dependent U.S. markets, including California."
• On Kudlow (Sept. 23), host Larry Kudlow (commentator and former White House economic adviser) said Wright, Burgum and Treasury Secretary Bessent all oppose a ban, "on the other hand… Vice President J.D. Vance and some Republican senators favor" it. "The president may be leaning toward it, but I hear the final decision has not yet been made."

Why a ban could backfire. The argument against a ban is not obvious at first, and it is the key point of this debate. The clearest version came on Grain Markets and Other Stuff (Sept. 23):

• "U.S. refiners produce 5.3 million barrels of distillate or diesel per day. Domestic demand is only 3.6 million, so that leaves a daily surplus of 1.7 million barrels per day that is currently exported."
• "If you ban exports, your storage tanks on the Gulf Coast would fill to capacity within weeks. It would be less than a month."
• Refineries would then have to slow down. They can't make diesel alone, because one barrel of crude produces gasoline, diesel and jet fuel together. Running less crude means less gasoline too, "which would be just as bad if not worse."

The industry's view. API's Mike Sommers made the same case with numbers, first on Kudlow and then on Squawk on the Street:

• The US supplies about 1.4 million barrels a day of the roughly 8 million barrels of diesel traded by sea worldwide, "call it 20 percent."
• A ban would cut US gasoline output "by roughly 550 to 750,000 barrels a day," which "some oil companies think… would translate roughly to a 30 cent hike in the price of a gallon of gasoline."
• "The duration really does not matter… our tanks start filling up almost immediately… The pipelines are currently full."
• Refineries are already maxed out: "on average, they're running at about 98%… many refineries are now stopping their planned turnarounds." (A turnaround is the scheduled maintenance shutdown refiners normally do each autumn.)
• Globally, "about 10% of global refineries are shut down right now because of the wars."
• API co-signed a letter against the ban with the Chamber of Commerce and the National Association of Manufacturers. "The national corn growers have also come out against this."
• His alternatives: suspend federal fuel taxes, bring back Jones Act waivers (exemptions from the rule that only US-flagged ships can carry cargo between US ports), coordinate strategic-reserve releases with allies, and press China to export more.

Morgan Stanley's take. On Morgan Stanley's Thoughts on the Market (Sept. 24), the firm's oil strategist Martijn Rats (analyst) explained why refiners can't simply make more diesel. A refinery's product mix is set when it is built. "There is a little bit of flexibility… within, you know, a few percentage points range… So the only thing you can do to make more diesel is to run the refinery at 100% utilization. That is currently where we are."

On the ban itself, Rats said the US is "broadly balanced in gasoline" but has "a very large surplus" of diesel. "So in the United States, you can get the counterintuitive outcome that a diesel export ban could lead to higher gasoline prices."

He also spotted a pattern in where diesel prices stall. Diesel "got to $200 per barrel" in 2022, again in March and April, and "now a couple of days ago, we reached that again." Each time, prices spiked and then pulled back. "It does look like what happens at $200, there either is demand destruction or… buyers just take a pause." Airlines and households drawing on their own fuel tanks make real demand destruction (buyers giving up fuel because it costs too much) hard to see. "There clearly is in China," he said, but elsewhere "it's not all that convincing."

Bank of America's view. On Squawk on the Street (Sept. 22), Francisco Blanch doubted a ban happens before the election. "I think it's too close… It will be likely litigated." He warned that diesel prices could go higher: "$1,600 to $1,800 range per tonne" on the ICE exchange in London, and "potentially $200 plus a barrel for a bit of time" in the US. "We're going to winter with no stocks… price is the mechanism" to bring demand down.

The global diesel pool. On The HC Commodities Podcast (Sept. 22), the anonymous newsletter writers at Doomberg (commentators) explained why small changes in diesel exports move prices worldwide:

• The world makes 26–28 million barrels a day of diesel, but only about 7 million are traded across borders by sea. "Those 7 million barrels are setting the price for all global diesel."
• Russia supplied about 800,000 barrels a day of that before Ukraine's drone attacks on its refineries. It has since become "a net importer."
• US exports rose from about 1.3 million barrels a day "as high as 1.9 million" in August to fill the gap.
• A second risk: the Russia sanctions bill that Trump signed targets India, and "60% of the diesel passing through the Red Sea on the way to Europe in August came from" India.
• A third risk: refineries running flat out. "What happens historically when you run refineries at 98, 99, or in India's case, 108% of nameplate capacity indefinitely?… They blow up."

6. Futures vs. physical oil, and a small restart in shale

The gap between oil on a trading screen and oil actually delivered today got a new number this week. On Marketplace All-in-One (Sept. 22), Rabobank energy strategist Joe DeLaura (analyst) said: "We now have a $26 spread again between Brent Physical and Brent Futures… Oil futures don't mean anything. Physical oil means everything." Dan Pickering of Pickering Energy Partners (industry insider) explained the difference. "Physical buyers are dealing with barrels available soon, right now," while futures are bets on later delivery, "and those two markets… have diverged."

The long end of the curve is rising. On The KE Report (Sept. 22), commodities trader Darrell Fletcher (industry insider) said physical crude is "$115, $120" while November futures sit below $100. The detail that matters for shale is further out. Oil for delivery across calendar 2027 was trading around "76, 77." Over five days it was "up about 1.5%… versus the front being off 3 or 4%." He expects 2027 prices to hold "between 75 and 80, if not higher." Producers decide whether to drill new wells based on those later-dated prices, not today's.

The rig count is starting to climb. Fletcher, who had just been in Texas, said "we are seeing the rig counts in the U.S. start to rise… especially in the Permian." Producers "were slow to react… because no one knew how long this war… would last." Now that it is dragging on, they are "more amenable to getting out there and spending money on growth," with "private equity… interest to start to rotate back into this." API's Mike Sommers put US output at "close to 14 million barrels a day," up "over a million barrels of production just since this president came into office." He warned that growth "would halt" under a diesel export ban.

7. The Saudi pipeline: back on, but for how long?

A big reason crude eased this week was news on Saudi Arabia's east-west pipeline. It carries crude across the kingdom to the Red Sea port of Yanbu, avoiding Hormuz, and was knocked out by drone strikes in mid-September. The podcasts gave slightly different accounts of how far it is back:

• RBN Energy (Sept. 23): "The East-West pipeline was shut for 11 days as a result of the attacks. It has since reopened but will likely remain constrained for several weeks due to ongoing repair work."
• Darrell Fletcher, The KE Report (Sept. 22): the first estimate was "three to five weeks" offline, "but I think the recent notes coming in today… were that there would be like 50% capacity here within the week."
• Ole Hansen, Saxo (Sept. 22): Saudi Arabia "has quietly been telling refineries in Asia that they will be ready to export again… within a relative short period of time."

The pessimistic view. On The Great Simplification (Sept. 23), an air-power scholar who has spent 20 years modeling a bombing campaign against Iran (academic) said the strikes hit "eight different points." Repairs don't need special equipment, "or else this would be a year out." The real problem is that a repaired pipeline is "hyper-vulnerable to being hit again" by Iraqi militias, the Houthis, Iran itself, or saboteurs on the ground. He added that a large refinery near Yanbu is an even easier target: "even if you decide to not hit the pipeline… you can go right and smash that refinery." His name for Iran's approach is an "escalation trap": Iran can open and close supply at will, "and that's what generates power."

How much Gulf oil is getting out? Bank of America's Francisco Blanch on Squawk on the Street (Sept. 22) said Gulf exports "range from 7 to around 12 million barrels a day," compared with about 20 million before the war, plus roughly 4 million on the east-west line. He disputed a Goldman Sachs estimate that 80% of pre-war exports are flowing: "Probably not… maybe you're getting 60 to 80 percent." Either way, "inventory is going down." That is why Bank of America just raised its fourth-quarter Brent forecast to "around $100 a barrel." He sees a way out only through diplomacy: "if everything clears out… we are going to have a market surplus in 2027. But… I don't think that that's very likely at this point."

8. Europe's winter gas: tight, but the problem is price, not running out

Two gas analysts on two podcasts this week gave the most careful numbers yet on whether Europe gets through the winter.

BloombergNEF's scenarios. On Switched On (Sept. 23), BloombergNEF European gas analyst Ahram Mohamed (analyst) ran through three cases for how full Europe's gas storage will be at the end of March. For reference, last winter ended at 27%.

Mohamed does not expect Europe to actually drain its tanks to 10%. Before that, "you'd expect some sort of response from prices and policy," with Europe competing "aggressively for LNG cargos" (liquefied natural gas shipped by tanker) against Asia. Asia is already rationing: in Pakistan, power is cut to households "for almost eight hours in some places."

The EnergyCents view. On EnergyCents (Sept. 24), the show's LNG analyst (industry analyst) gave the price path. Asian and European benchmark gas prices (JKM and TTF) are "about $25 per million BTU… that's TTF at €75 per megawatt hour," and he sees that as "kind of the ceiling" for September to November. If Gulf LNG doesn't return until March, "we do see prices through the winter at a sort of $30 level… probably €95 per megawatt hour for TTF." He pushed back on the scary headlines: "this is not an issue of Europe running out of gas and people… freezing in the dark… It's just a question of price." Europe's gas demand is already "structurally" down "between 10 and 15%" since 2022. The people who lose out are poorer buyers: "Pakistan, Bangladesh… just can't afford to buy spot gas. And that leads to… brownouts." One long-term detail: after a March attack, "17% of Qatar's liquefaction capacity at Ras Laffan… is out for probably four years or so."

9. Russia's refineries: now a bigger factor than Hormuz for diesel

Ukraine kept hitting Russian refineries, and the numbers are now very large. RBN Energy (Sept. 23) put Russian refinery throughput "below 4 million barrels per day over the past two months… less than 60% of capacity, its lowest level in more than 20 years." Russian "diesel production [is] down by close to 30%, diesel exports have been totally shut and gasoline imports are needed to meet domestic demand."

Doomberg (HC Commodities, Sept. 22) called the attacks "the root cause of the diesel crisis," with Europe the biggest loser: "There is no region on Earth that is more dependent on imports." The show's host added that "Donald Trump had specifically asked them not to" hit the refineries.

Michael Every (Macro Voices, Sept. 24) offered a second, more cynical reading. If the US limits diesel exports, Europe would be hit hardest. It would then "have to be the ones who clip Zelensky's ear" and push harder for a settlement. His host cited Gulf oil analyst Anas Alhajji, usually "the never escalate man," who now says "diesel is the crisis" after a strike that the host said "took out something like 40% of Russian diesel refining capacity."

10. Oil and interest rates: yields at 20-year highs

Oil is now one of the main things moving bond prices. On CNBC's Fast Money (Sept. 24), senior economics reporter Steve Liesman (reporter) counted a "66 basis point move in the 10-year in 11 days," including 22 basis points in two days, the biggest two-day jump since April 2025. He blamed "the high oil prices, hawkish Fed talk, more Fed rate hikes expected." New York Fed President John Williams said "another rate hike may be appropriate by the end of the year." Host Melissa Lee noted the two-year yield "has moved higher by more than 150 basis points since the Iran war started." Power Lunch put the 10-year at 5.16%, "a new kind of 20-year high," with Germany's 10-year at a post-2009 high and Japan's the highest since 1996.

How many more hikes? On Goldman Sachs' Exchanges (Sept. 23), former Dallas Fed President Robert Kaplan, now Goldman vice chairman (former Fed insider), said the market is "expecting more hikes than… is likely." His own path: "skip October," move again "in December," which would take the Fed's rate to "four, four and a quarter… in the neighborhood of neutral" (the level that neither speeds up nor slows down the economy). His key point on oil: part of the market's extra caution reflects the risk that "we can't find a way to resolve the war in Iran… and the probability that the oil price bleeds into 30 or 40 items increases."

How much is energy adding to inflation? On Economic Insights by Nationwide (Sept. 24), Nationwide chief economist Kathy Bostjancic (economist) broke down today's 3.7% inflation rate (the PCE index the Fed prefers):

• Energy directly adds "about four-tenths of percentage points"
• Tariffs add "roughly six-tenths"
• AI spending adds "about three-tenths"
• Without all three, inflation would be "around 2.4"

Her colleague Oren Klachkin estimated "the average American household is right now slated to spend upwards of $800 more at the pump this year compared to last year." He said food prices are where diesel will show up next.

The US as a winner. Bank of America's Blanch (Squawk on the Street) gave the other side of the ledger: "the U.S. is now the largest petro state in the world… a third of the world's gas, 20 percent of the world's oil… the U.S. has the largest market share gain ever seen." That helps explain why the US economy keeps growing through the shock, and why "it makes it a little difficult for the Fed also to rein inflation in."

11. The bottom line

• Diplomacy is real, but the calendar is political. Both Washington and Tehran are pointing to after November 3. The insiders (Roule, Montgomery, Schachter) see Iran's four core demands as unchanged and a settlement "into 2027 at the best." Gulf states reject the "joint oversight" compromise Washington reportedly finds acceptable.
• Crude's five-day slide was built on three things: talks, a partial Saudi pipeline restart, and Navy-guided tanker flows. All three can be reversed. Haass's warning is the one to keep in mind: 90% of the region's energy infrastructure is still standing.
• Diesel is now a policy fight as much as a supply problem. Every energy expert who spoke this week, from API and Morgan Stanley to Bank of America, Nationwide and the Energy Secretary, said an export ban would raise gasoline and world diesel prices. The President still hasn't ruled it out.
• China is the swing factor in two ways. It could export more fuel if Beijing loosens export limits, and it is starting to buy crude again after running down its stockpiles.
• Europe's gas problem is about price, not running out. Expect TTF around €75 for now, and nearer €95 if Gulf LNG stays offline until March.

What to watch next week: any US reply to Iran's Hormuz proposal and whether the "phased deal" reporting holds up; whether Trump signs a diesel export restriction, including a "voluntary" version; how fast the east-west pipeline returns to full flow; Chinese fuel-export quotas for October; the next EIA refinery-utilization and distillate-inventory numbers (Schachter noted utilization dipped to 94% this week); and whether the 10-year Treasury yield holds above 5%.