Oil in the oceans of geopolitics. US margins rose to over $45 per barrel in July 2026.
Photo: Marek Grzybowski
By American oil exporters are likely the biggest beneficiaries of sanctions against Russia and the blockade of the Strait of Hormuz today, notes Banchero Costa Research in its latest report. Oil producers are benefiting from OPEC’s efforts to raise prices by reducing the supply of oil to the global market. US exports have surged in recent years, to the point where it is now the world’s third-largest exporter, after Saudi Arabia and Russia.
EU importers are bearing the extraordinary costs of oil market manipulation. “Oil demand in European OECD countries fell by about 620 tb/d year-on-year in May, after a year-on-year decline of 820 tb/d in April,” notes the latest “OPEC Monthly Oil Market Report” from August 2026. Demand has declined in almost all countries in the region.
American exporters are earning more than $45 per barrel of oil following the blockade of the Strait of Hormuz. Importers are suffering the consequences of the Gulf War and are being forced to pay for extraordinary margins. According to preliminary data, the refining margin for USGC crude oil against WTI averaged $45.70/b in July, OPEC reported in its August market report.
Germany, France, Italy, and the United Kingdom collectively led to an approximately 80% year-on-year decline in crude oil demand in May of this year. Reduced diesel supply, accounting for approximately 80% of the overall year-on-year decline in demand, had a significant impact on the market. European countries reduced diesel demand by approximately 540 tb/d, slightly below the 560 tb/d year-on-year decline seen in April of this year, OPEC found. The largest year-on-year declines in demand were observed in Germany and France. These countries reduced imports by a combined 52% year-on-year.
Refineries in all markets operated relatively steadily. Historically, global crude oil supply fluctuations continue. Additional crude oil deliveries from Russia, which utilized shadow fleets in addition to legal operators, undoubtedly played a role.
After a slight decline in crude oil supply in 2024, when global supplies declined by 0.2% year-on-year, the situation improved in 2025. Additional volumes were introduced to the market, and tankers performed additional work throughout the year. This was evident in refinery operations, with no downtime reported.
OECD refinery operating activity. Source: OPEC Monthly Oil Market Report, August 18, 2026.
More crude oil in 2026
Loadings at oil exporters’ terminals increased by 1.8% year-on-year. Global crude oil cargoes declined again in the January-July 2026 period. Tankers transported 6.1% less crude oil year-on-year between fuel terminals. Supply amounted to 1,190.6 million tons, excluding all cabotage trade, reports Banchero Costa Research in “United States Crude Oil Exports,” citing LSEG ship tracking data.
The blockage of the Strait of Hormuz caused Persian Gulf exports to fall by 30.8% year-on-year to 351.8 million tons in the January-July 2026 period. This represented 29.5% of global seaborne crude oil supplies. This was a significant drop compared to historical highs of around 40% last year.
This resulted in price increases in March, April, and May. In July, the OPEC Reference Basket (ORB) fell by $6.76/b month-on-month to an average of $82.99/b, according to OPEC.
US Crude Oil Exports in 2024-2026 Source: Banchero Costa Research “United States Crude Oil Exports”
Prices on the Rise
The ICE Brent crude oil futures contract for July delivery fell by $0.46/b month-on-month to an average of $83.97/b, while the WTI NYMEX crude oil futures contract for July delivery fell by $2.57/b to an average of $79.22/b, OPEC reports. The GME Oman crude oil futures contract for July delivery fell by $1.73/b month-on-month to an average of $77.52/b. As a result, “the forward curves for ICE Brent and GME Oman crude oil strengthened in July.”
Geopolitical risks and concerns about the rapid availability of supplies supported futures, and oil market fundamentals remained solid. OPEC is highlighting “speculative buying, particularly in ICE Brent, which contributed to the strengthening of the backwardation effect.” The NYMEX WTI structure flattened slightly, but price volatility persisted. This occurred as US crude oil inventories continued to decline in July of this year.
Russian suppliers and tanker operators, who transport Russian crude to countries that have not opted into the sanctions regime, capitalized on the market volatility. Exports from Russian ports (including crude oil of Kazakh origin) increased by 7.1% year-on-year to 141.8 million tons in the January-July 2026 period. This represented 11.9% of global trade, according to Banchero Costa Research.
From South America, exports increased by 33.1% year-on-year to 162.9 million tons. From the US, exports increased by 17.1% year-on-year to 120.9 million tonnes in the January-July 2026 period. From West Africa, supplies decreased by 10.4% year-on-year to 91 million tonnes. ASEAN countries capitalized on the boom and increased exports by 13.9% year-on-year to 70.5 million tonnes in the January-July 2026 period. Banchero Costa Research notes that re-exports should be included here. Some fuel terminals reloaded Iranian and Russian shipments.
Monthly US Crude Oil Exports from 2022 to 2026, Source: Banchero Costa Research “United States Crude Oil Exports”
China and the EU on Crude Oil
In terms of demand (measured by the number of arrivals at unloading ports), China was the largest importer of crude oil by sea in the January-July 2026 period. 19.5% of global crude oil imports were unloaded at its fuel terminals. Import volumes to China decreased by 18.2% year-on-year to 233.1 million tons in the January-July 2026 period. In 2025, 285.1 million tons of crude oil were imported during the same period.
EU-27 imports increased by 1.9% year-on-year to 268.6 million tons. EU countries generated demand for 22.5% of global crude oil trade. The EU market is therefore a larger recipient than the PRC economy in 2026. ASEAN imports fell by 8.6% year-on-year to 152.7 million tons. India’s imports were almost unchanged (down 0.4% year-on-year), reaching 138.9 million tons by July 2026. South Korea’s imports fell by 13.4% year-on-year to 70.5 million tons, and Japan’s decreased by 19.2% year-on-year to 52.5 million tons. American imports, on the other hand, increased by 4.7% year-on-year to 72.8 million tons between January and July 2026.
The United States currently accounts for 8.2% of global crude oil supplies. Historically, US crude oil exports increased by 22.9% year-on-year in 2022 and by 19.5% year-on-year in 2023. 2024 proved to be a slightly weaker year, with exports falling slightly by 0.3% year-on-year to 197.4 million tons. 2025 proved to be significantly worse, with exports for the year falling by 7.8% year-on-year to 182.0 million tons, reaching their lowest level since 2022.
This year, US crude oil exporters rebounded from the lean years. In the January-July 2026 period, exports rebounded by 17.1% year-on-year to 120.9 million tons. The blockage of the Strait of Hormuz caused a rebound in April-May. Exports reached 21.6 million tons and 22.6 million tons, respectively.
Oil demand of European OECD countries. Source: OPEC Monthly Oil Market Report, August 18, 2026
US Exports of Expensive Oil
US fuel terminals operated at increased capacity in 2026. Approximately 50% of US crude oil exports during the January-July 2026 period were loaded onto tankers docked in Corpus Christi. Approximately 17% of US crude oil exports were pumped in Houston, and approximately 8% in Galveston. Approximately 7% of US crude oil was loaded onto tankers at Bayport terminals, while approximately 5% were loaded at LOOP and approximately 5% at Beaumont.
Given continued infrastructure constraints, only 43% of crude oil volumes loaded at US ports during the January-July 2026 period were loaded onto VLCCs. Previously, up to 51% of exports were loaded onto tankers of this size. Most cargoes at VLCC tankers are pumped through terminals in Corpus Christi, Galveston, and LOOP. Approximately 22% of volumes are loaded onto Suezmax vessels, and 33% onto Aframax vessels.
American crude oil primarily goes to Europe (43%) and Asia (40%). Tankers transport the remainder to the Americas and Africa. In Europe, approximately 43.6 million tons (36.1% of the total) were shipped from the US to the European Union between January and July 2026, according to Banchero Costa Research in “United States Crude Oil Exports.” This represented a significant 27% year-on-year increase. Approximately 6.5 million tons (5.4% of the total) went to the United Kingdom.
Fuel terminals in the Netherlands received 13.2 million tons of crude oil, and 7.4 million tons to France. Italian terminals unloaded 5.7 million tons of American crude oil, while Spain unloaded 5.5 million tons. Tankers transported 4 million tons of American crude oil across the Atlantic to Germany, 2 million tons to Sweden, and 1.2 million tons to Denmark.
In Asia, approximately 15.2 million tons were shipped from the US to South Korea between January and July 2026, representing a 22.8% year-on-year increase. Japan imported 12.1 million tons of crude oil from the United States. India imported only 3.7 million tons of American crude oil, reducing its imports from that country by 55.1% year-on-year.
Oil price changes July 2025 – August 2026. Source: “OPEC Monthly Oil Market Report” from August 18, 2026.
However, additional margins had to be paid for higher prices. According to preliminary data, in July, US refineries increased crude oil processing by 139 tb/d (month-on-month), reaching an average of 17.42 mb/d. The USGC crude oil refining margin against WTI has already approached an average of $46/b. In just one month, oil producers secured an extraordinary margin increase of $16.35/b (month-on-month) and over $31/b (year-on-year), OPEC reported.
China reduced its crude oil imports from the US by 46.1% year-on-year in the January-July 2026 period, to just 1.6 million tons. For comparison, 13.8 million tons were imported between January and July 2023. This market turmoil led hedge funds and other fund managers to increase their speculative forecasts in July of this year.
This is explained by uncertainty regarding the development of the situation in the Middle East, which has led to price fluctuations. Even a small increase in supply could stabilize oil prices at a level acceptable to buyers.
However, it’s more likely to be a matter of certainty that the situation in the Middle East and the Black Sea will remain unstable for a long time. Therefore, speculative buying has intensified on the ICE Brent market. Therefore, due to geopolitical tensions, disruptions in oil supplies can still be expected. Suppliers and speculators will profit, while importers and consumers contribute.
Prognoza produkcji ropy w latach 2026-2027. Źródło: „OPEC Monthly Oil Market Report” z 18.08.2026 r.