Energy: Tanker for Tanker

Back to square one. While investors had breathed a sigh of relief following the signing of the memorandum of understanding between the two belligerents, skirmishes have flared up again in the Strait of Hormuz. And in the land of black gold, as elsewhere, Lavoisier’s principle holds true: supply constraints are being transformed into a range of problems across the entire energy value chain, which are worth examining in greater detail.

The first question, however, is just how severe the shortage facing oil markets really is. On 2 September, US Energy Secretary Chris Wright stated that 17 mb/d had passed through the Strait two days earlier, on Monday 31 August. At the same time, the International Energy Agency’s latest monthly report estimated that an average of 7.6 million barrels crossed this stretch of water each day in August, around 13 mb/d less than before the conflict.

So who is right? The reality probably lies somewhere between the two estimates, due to “dark crossings”, whereby vessels pass through the Strait with their lights and transponders switched off. In an attempt to gain a clearer picture, US investment bank Goldman Sachs conducted a study combining data from specialist firm Kpler with historical estimates in order to smooth out methodological biases. Its analysts concluded that exports had recovered to 15 mb/d by the end of August.

However, the situation deteriorated sharply in early September, with both sides applying the law of retaliation in its oil-market form: tanker for tanker. Against this renewed backdrop of tension, dated Brent — a benchmark reflecting physical market transactions — is trading at $125/bbl at the time of writing, followed by the “paper barrel”* at $103/bbl. Moreover, the two safety buffers that helped limit the damage during the first phase of the conflict cannot be replicated: US strategic petroleum reserves are at a 44-year low, while Chinese imports are 20% below their August 2025 levels, just as the Houthis are gaining ground around the other key strait, Bab el-Mandeb.

The rise in Brent prices is only the tip of the iceberg. As shadow-fleet vessels mainly transport crude oil, LNG exports remain desperately low, at around 20% of their pre-conflict average, according to Goldman Sachs. Qatar’s extension of force majeure is also creating fierce competition between European and Asian gas buyers, with prices acting as the sole adjustment mechanism. European gas prices are hovering around €80/MWh in order to attract LNG carriers, at a time when European storage facilities are struggling to refill: at the latest count, they were 64% full, 18 percentage points below the five-year average for this time of year.

The most acute physical-market tensions are in refined products, which are being hit not only by the disruption in the Strait of Hormuz but also by the fallout from attacks on Russian production capacity. Refining, a highly cyclical business by nature, is consequently generating margins at unprecedented levels, at around $40/bbl on both sides of the Atlantic. Within the downstream complex, diesel inventories are the most depleted, triggering a spectacular surge in prices to more than $6 per gallon** in the United States, above the previous record set in 2023.

Unable to resolve the situation by force, the US administration has decided to adjust its strategy by deploying financial pressure instead. On 24 August, Scott Bessent referred to an “economic D-Day”, arguing that Iran’s slide towards bankruptcy was “accelerating”. More specifically, the United States is threatening entities that do business with its adversary with so-called secondary sanctions. Against this backdrop, all eyes are naturally turning to China, whose small private refineries consume most of Iran’s crude oil, ahead of a meeting between the two countries’ leaders on 24 September.

For their part, although central banks are poorly equipped to deal with a supply shock, they cannot remain idle in the face of the impact of hydrocarbon prices on inflation. It is against this backdrop that the ECB and then the Fed raised their policy rates in turn and revised their inflation forecasts upwards***. The key issue for these monetary institutions remains second-round effects and, ultimately, the potential de-anchoring of inflation expectations. In this respect, five-year, five-year forward inflation rates — market indicators closely monitored by investors — have risen by 10 bp to 2.15% in Europe and have remained stable at 2.4% in the United States since the start of the year.

While awaiting any hypothetical indirect impact of higher policy rates on hydrocarbon prices, the European Commission conveniently published an electrification action plan this summer aimed at increasing the role of electrons relative to molecules. The plan is not solely about decarbonisation, but also about security of supply.

Unsurprisingly, energy resilience has become a central theme for governments across the region and echoes the Draghi report published two years ago. This initiative will provide structural support for investment over several years and across a broad range of related sectors, including infrastructure, generation and storage. This could open up a new field of opportunities for investors seeking to diversify their exposure away from the technology sector, which has become about as consensus a trade as it gets****.

* Brent futures, November expiry;

** Diesel crack spread of $100/bbl;

*** 2.6% in Europe in 2027 for core HICP, and 2.5% in the United States for core PCE;

**** According to the latest Bank of America survey, exposure to the semiconductor sector is the most widely held position.

Pierre Pincemaille, General Secretary of Investment at DNCA. This article was finalised in Septembre 18th, 2026.

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