Saudi crude floods back through Hormuz as diesel posts its biggest monthly drop in 25 years
Saudi Arabia is moving crude through the reopened Strait of Hormuz as fast as it can load ships. About 10 million barrels have cleared the strait in recent days, with Aramco sending at least five supertankers out of Ras Tanura and four more very large crude carriers lined up behind them, per Reuters shipping data. For US carriers and fuel haulers, returning Gulf supply is the thing that feeds lower crude, then lower diesel, then a smaller fuel surcharge a few weeks out.
The Hormuz reopening
The strait carries a fifth of the world's seaborne oil, so when tankers stopped moving, the risk premium went into every barrel and every gallon of diesel priced off it. That premium is now coming out. Aramco is ramping exports to Asia and clearing the backlog, which tells you the shipping lane is open and the operators believe it stays open.
More barrels on the water means the crude that sets US diesel is under less pressure. Diesel is the number that runs a hauler's P&L, and the fuel surcharge most carriers bill off the weekly DOE average lags the pump by a week or two. If crude keeps easing, the surcharge could come down into late July, which helps shippers and squeezes any carrier still pricing off last month's higher number.
The diesel drop
Diesel posted its biggest monthly fall in more than 25 years, according to Business Motoring. That figure is a UK read, so treat it as a signal on direction rather than a US pump price. It lines up with what the crude move implies: the fear bid that ran through the strait scare is unwinding, and diesel is following it down on both sides of the Atlantic.
Renewable diesel and biodiesel
Idemitsu, Isuzu and T2 launched a 500-km renewable diesel truck trial, testing drop-in fuel over real freight distance. It is a Japan pilot, so it does not touch US supply yet, but drop-in renewable diesel is the version of the low-carbon story that runs in existing trucks without new tanks or engines.
Closer to home, the Hamilton biodiesel facility is being saved from permanent closure, per ConstructConnect. One plant staying open does not move the diesel curve, though it keeps regional biodiesel blend supply from thinning further.
What to watch
Whether the crude easing shows up in next week's DOE diesel average and starts pulling surcharges down. Watch whether Saudi keeps loading at this pace or throttles back once the backlog clears, and whether the Hormuz calm holds. If it does, diesel could keep softening into August.