Gulf Crude Exports Are Recovering. Refined Products Are Not.
Persian Gulf product exports sit at 40% of pre-war levels while crude flows approach two-thirds, leaving diesel margins sharply elevated.
Goldman Sachs analysts put a number on the divergence on Friday (2026-08-28). Total crude and oil product exports from the Middle East have risen to 15 to 16 million barrels a day, the bank's commodity team including Daan Struyven and Yulia Zhestkova Grigsby said in a note — well above the March 2026 trough of 5 to 6 million barrels a day and roughly two-thirds of pre-war levels. The headline looks like a recovery story.8
Crude and products are not recovering in step, and the gap is wider than the aggregate export figure suggests. Persian Gulf crude shipments have likely returned to between 70% and 80% of pre-conflict levels, while product exports remain at only about 40%, Goldman said. ICE Brent crude front-month was trading at $96.46 a barrel as of September 3, off 0.41% on the session — a modest retreat that reflects market attention on crude volume recovery rather than the product shortfall running beneath it.7,8
The crude recovery is real. Flows through the Strait of Hormuz alone have risen to about 7 to 8 million barrels a day, up from around 4 million barrels a day in mid-July (2026-07), according to Bloomberg's trading sources. IEA data show Saudi Arabia boosted output from 7.34 million barrels a day in June 2026 to 8.24 million in July 2026, while total OPEC+ production climbed to 34.53 million barrels a day in July from 33 million barrels a day in June.7,5
But refineries do not restart at the pace of crude wells. Goldman estimated in the week of June 1 (2026-06-01) that global refined product exports were running 4 million barrels a day below pre-war levels, with Middle East refinery damage alone accounting for 2.5 million barrels a day of that shortfall. Margins responded: the bank's analysts said refining margins had reached two to three times their 2013-to-2019 average, with diesel specifically running $19 to $26 a barrel above pre-March 2026 levels.1
The product problem has a second source outside the Gulf. Reuters estimated that Russian diesel output fell 10% in the month preceding the early-June (2026-06) reporting, following a prior 10% decline in April 2026, driven by continued attacks on refinery infrastructure. That cumulative compression tightens an already constrained Atlantic diesel market and pushes buyers toward whatever Gulf product barrels can be sourced.1
U.S. distillate data underline the direction of travel. EIA figures released on Wednesday (2026-08-26) showed stocks including diesel and heating oil fell by 2.2 million barrels in the week ended August 21 (2026-08-21) to 103.4 million barrels. That draw came even as the crude side of the U.S. balance looked bearish: crude stocks had risen 17.4 million barrels in an earlier week — the largest increase since January 2023, Reuters reported. Heating oil futures were trading at $4.67 a gallon as of September 3, up 0.21%, a divergence from crude's mild weakness that reflects the tighter product supply picture.6,5
Goldman's own reading of the reopening dynamic compounds the picture. The bank wrote that it expects gasoline and especially diesel stocks to decline further during the initial Hormuz reopening phase, because demand is likely to recover more quickly than supply. A resumption of unrestricted shipping restores crude flows first; refinery restarts and product logistics follow on a longer lead time. The EIA, in its June 2026 Short-Term Energy Outlook, assumed the strait would remain effectively closed near term with shipments resuming in third-quarter 2026 — a baseline since partially overtaken by events, but whose core assumption about product recovery lagging crude recovery still holds in Goldman's framing.3,2,1
For crude prices, Goldman's macro overlay is sobering: the bank forecasts a global oil surplus of 3.2 million barrels a day in 2027 and expects ICE Brent to converge toward $75 a barrel over the medium term. That caps crude upside even if Gulf flows tighten again. The diesel and heating oil market operates under a different set of constraints, where the refinery restart timeline — not the Hormuz crude transit count — is the binding variable.3
If Gulf product exports remain near 40% of pre-war levels into October and November 2026, when Northern Hemisphere heating demand typically accelerates, the pace of distillate draws will pressure margin forecasts for complex refiners positioned to compete for Atlantic and heavy sour barrels — the group Rystad identified as most likely to absorb the product supply dislocation. Weekly EIA distillate inventory draws relative to the five-year seasonal average are the data series that will show whether the product shortfall is narrowing in a way current crude flow figures do not yet confirm.4,8