Oil Nears $100 as Trump’s ‘Economic D-Day’ Raises the Stakes
Dear Guercy ,
Hormuz traffic remains near a standstill as Trump’s ‘Economic D-Day’ campaign pushes Brent closer to $100.
Friday, August 21, 2026
Transits through the Strait of Hormuz have been in single digits the entire week, with Trump’s announcement of an ‘Economic D-Day’ campaign against Iran increasing geopolitical risk premia in the markets. With ICE Brent at $94 per barrel, Asian LNG prices at $24 per MMBtu and VLCC freight rates at exorbitant levels, this week’s gradual upward creeping momentum towards $100-per-barrel oil should continue over the remaining days of August.
Trump Turns the Iran War Economic. US President Trump threatened sweeping penalties and ‘tremendous consequences’ against countries trading with Iran, putting China and its imports of Iranian oil in the crosshairs as the White House announced the start of ‘economic warfare’ against Tehran.
Iraq Targets 10 Million—If OPEC and Export Routes Allow. Despite current production restrictions that see output around 2.9 million b/d, the new Iraqi government claimed it plans to reach output of 8–10 million b/d within 6 years, seeking a larger OPEC quota and developing alternative export corridors.
US Mops Up Half of Venezuela’s Oil Now. US refiners are receiving more than 500,000 b/d of Venezuelan crude as the country’s output approaches 1.25 million b/d, according to US Energy Under Secretary Kyle Haustveit, while sending over 100,000 b/d of naphtha to dilute its heavy barrels.
Baghdad Opens New Routes Around Hormuz. The Iraqi government approved 3-month contracts allowing local and international firms to market crude through multiple export outlets until the end of the year, seeking to protect state revenues by reducing dependence on the Strait of Hormuz.
Pirates Divert Tanker Toward Somalia. Six armed assailants seized control of Sibu-1, an Eritrean-flagged tanker carrying products from the Gulf of Oman to Sudan, east of Yemen’s Mukalla, with resurfacing piracy risks marking another security threat to a region already strained by Houthi attacks.
Iranian Crude Loses Its China Discount. The US maritime blockade of Iran has restricted new crude shipments to Asia and drained floating storage, pushing some Iranian barrels from a $3 discount to a $2 premium over Brent, with higher prices forcing Chinese teapots toward Brazilian and Iraqi alternatives.
Imminent Tengiz Peak Puts Pressure on Kazakhstan. US oil major ExxonMobil (NYSE:XOM) expects Kazakhstan’s largest field, Tengiz, to plateau at 1 million b/d in 2027 before output falls to 500,000 b/d by 2035, nudging the state to resolve legal disputes blocking a potential $80 billion Kashagan expansion.
Japan Swaps Hormuz Risk for Record US Energy Flows. Japan’s imports of US crude surged more than 8-fold to a record 891,000 b/d in July—36% of Japan’s total inflows —while its intake of US LNG jumped 59% as Tokyo diversified away from disrupted Middle Eastern supply, buoyed by lower WTI prices.
El Niño Puts the Panama Canal Back on Rations. The Panama Canal Authority announced that it would restrict daily transits from about 35 currently to 32 by mid-September after watershed inflows plunged 44% below normal, renewing the threat of vessel queues, higher auction costs and reduced cargo loads.
AI Puts Seoul’s Coal Exit to the Test. The South Korean government raised its 2040 peak power demand forecast by about 27 GW to as much as 165 GW as semiconductor plants and data centres multiply, challenging plans to eliminate coal—which still supplies nearly 29% of generation—by the same year.
Equinor Follows Big Oil into Namibia. Norway’s state oil firm Equinor (NYSE:EQNR) has agreed to purchase 17.4% of Chevron’s offshore PEL 90 exploration licence in Namibia —its first upstream entry into a new country since 2017—with first exploration drilling in the Orange Basin due by year-end.
Washington Pours $0.5 Billion Into Mineral Independence. Seven US processing, recycling and battery-material projects will receive US federal grants, including $100 million each for lithium, cobalt and black-mass facilities, as the Trump administration seeks to reduce mining supply-chain dependence on China.
Biofuels and El Niño Ignite Palm Oil Rally. Palm oil prices reached a 20-month high of $1,220 per tonne this week after Indonesia’s recently announced B50 biodiesel mandate has started to divert vast amounts into fuel supply, just as El Niño-triggered droughts threaten Southeast Asian production.
Central African Mine Collapse Kills Over 100. Rescue efforts continue after the collapse of the Zamboye artisanal gold site in the Central African Republic near the Cameroonian border, highlighting the deadly consequences of weak regulation and safety standards across Africa’s informal mining sector.
Norway’s Barents Gas Risks Staying Stranded. Norway’s Offshore Directorate (NOD) warned that large portions of untapped resources in the country’s northern Barents Sea would remain out of bounds unless new export capacity is built, with the only northern terminal - Hammerfest LNG - fully utilized.
Best Regards,
Tom Kool
Editor, Oilprice.com
