Is Iran Preparing to Permanently Block the Strait of Hormuz?

Is Iran Preparing to Permanently Block the Strait of Hormuz?

Tom Kool

Fri, August 7, 2026 at 7:04 PM GMT+3 5 min read

• CL=F +0.89%

Conflicting signals from Washington and Tehran keep oil markets on edge as Iran weighs a permanent Hormuz shipping ban while Trump insists a deal is within reach.

Friday, August 07, 2026

The oil market's very own schizophrenia – trying to read into the contradicting claims of US President Trump and Iranian officials seeking to escalate the blockade of Hormuz even further – continues to puzzle industry analysts and traders. Iran's Parliament is reviewing a bill to permanently ban US, Israeli and other hostile vessels from the Hormuz, backed up by a flurry of drone and missile strikes in the Strait, just as Trump claimed a final deal is 'close'. ICE Brent is set to close the week at $83 per barrel.

Iran and Oman Draw the Lines Through Hormuz. Tehran and Muscat have agreed on the coordinates of a proposed shipping corridor giving Iran control over Gulf-bound vessels, but Iranian officials cautioned that key details remain unresolved, and the new deal alone would not guarantee security in the strait.

Aramco Splits Its September Pricing Strategy. Saudi national oil firm Saudi Aramco (TADAWUL:2222) cut its flagship grade Arab Light for Asia by 50 cents to a $2/barrel discount against Oman/Dubai but raised scarce Arab Medium and Heavy grades by $1.25/barrel, suggesting it could boost Gulf output soon.

Court Blocks Trump's $20 Billion Climate Clawback. A US federal appeals court ruled that the EPA could not cancel Biden-era clean-energy grants solely over policy disagreements, restoring an injunction protecting $20 billion in funds for nonprofit lenders such as the Climate United Fund or CGC.

US Major Changes Guard After 14 Years. Ryan Lance, CEO of ConocoPhillips (NYSE:COP), will retire next month and hand the reins to CFO Andy O'Brien after transforming the company into the world's largest independent oil producer, having bought Concho Resources, Shell's Permian assets and Marathon Oil.

China Opens Its Fuel Export Taps Wider. Beijing has relaxed restrictions on refined product exports for a second month, allowing August transportation fuel shipments of up to 3.6–3.7 million tonnes—well above last year's monthly average—as refinery runs recover, reaching 13 million b/d last month.

Mexico Bans Fracking Despite US Gas Dependence. Mexico's President Claudia Sheinbaum has ruled out pilot fracking projects in Coahuila and Tamaulipas despite rumours claiming the contrary, even though falling conventional gas output leaves Mexico reliant on the US for 75% of its gas needs.

Rhine Shipping Costs Explode as Water Hits Record Low. Navigable depth at Kaub fell to just 17 cm this week, forcing vessels to carry barely 20% of normal loads and tripling inland German tanker freight to €160 per tonne, however light precipitation on Friday has halted the past weeks' continuous declines.

US Natural Gas Sinks Despite the Summer Heat. Henry Hub futures fell to a 14-week low of $2.64 per MMBtu after gas inventories jumped by 33 Bcf—well above the 5-year average—as near-record production and weaker LNG feedgas flows outweighed higher cooling demand across the country.

China Pushes the Yuan into Iron Ore Pricing. China's main steel association CISA called for yuan-denominated benchmarks based on its vast port-side market, seeking to boost its clout in a market dominated by Australian and Brazilian miners and pushing for more yuan term deals for state buyers.

Related: ADNOC Reports 15 Vessel Attacks as Hormuz Risks Mount

Britain Tightens the Screws on Russia's Shadow Fleet. London sanctioned 6 Russian banks, 6 newly acquired tankers and 4 companies importing weapons-grade tantalum and niobium, expanding a pressure campaign that has now targeted more than 3,400 Russian individuals and entities since 2022.

Russia Drops Fuel Standards as Refineries Burn. Moscow has extended its waiver allowing refiners to produce lower-grade (Euro-2,3 and 4 standard) gasoline until July 2027 as Ukrainian attacks leave roughly 40% of refining capacity offline and pushed the country's crude runs to a 21-year low in July.

Trump Puts a Price Floor Under US Solar. The White House will impose a 15% tariff and minimum import prices on polysilicon, wafers, cells and panels from December 4, seeking to shield domestic solar from Chinese competition and kick-start domestic polysilicon output, having only 2 factories currently.

China's Rare-Earth Exports Hit a Summer Slump. Chinese exports of rare earths fell 17.3% month-on-month in July to a four-month low of 4,224 tonnes, down 30% from a year ago, as slower approvals from Beijing and seasonally weakening buying patterns from overseas customers led to a drying up of flows.

Congo Slams the Door on Raw Copper and Cobalt Exports. The Democratic Republic of Congo has banned copper (#2 globally) and cobalt (#1 globally) concentrate exports with immediate effect to force more domestic processing and boost mining revenue as the 0.5 mtpa Kamoa-Kakula smelter ramps up.

Iraq and Syria Dust Off a Hormuz Bypass. Baghdad and Damascus aim to rebuild the Kirkuk–Baniyas pipeline by 2029, potentially carrying 1.5–2 million b/d to the Mediterranean and giving Iraq a much-needed alternative after the Hormuz closure exposed its near-total dependence on Gulf export routes.

By Tom Kool for Oilprice.com

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