Goldman Sachs reverses glut call, warns Hormuz attacks could slow recovery of 10.5 million barrels a day
Goldman Sachs told clients this week that renewed fighting in the Persian Gulf threatens an extended supply disruption, a week after the same desk warned an oil glut was coming. Middle East oil production remains 10.5 million barrels a day below pre-war levels, the bank's commodity analysts said, and recent attacks on tankers put the restart at risk. "Hormuz disruptions could slow down the production recovery," they wrote, per Bloomberg.
For anyone buying at the rack, that reversal matters more than the call itself. Producers had started reopening shut-in wells over the last month. Reopening a well is not the same as getting the barrel to a refinery, and if tankers can't move through the strait, the recovery stalls with the crude still in the ground or sitting in storage. Crude could hold a firmer floor than the glut talk implied.
Record US output
The US produced more crude than any other country in 2025, according to EIA's International Energy Statistics, extending a run that started in 2018 when the US passed Russia for the top spot.
Being the largest producer does not decouple the US rack from Hormuz. Crude prices globally. A jobber in Ohio pays for the barrel the Gulf isn't shipping the same as a buyer in Rotterdam does, and record domestic output has not changed that arithmetic in any of the eight years the streak has run. What it does buy is a cushion on the crude side while refining capacity, not wellhead supply, sets the ceiling on product.
A Russian refinery offline
One of Russia's oldest and largest refineries has halted operations after a drone attack, per Liga.Biz. US operators do not buy Russian diesel, so the direct exposure is zero.
The indirect exposure is not. Turkey buys diesel out of Russian refineries. So do importers in Africa and Latin America. Pull that volume out and those buyers bid for barrels somewhere else, which can pull cargoes off the Atlantic Basin and tighten distillate at a moment when crack spreads are already carrying the load. Watch the diesel crack, not the crude flat price.
Russian crude to Indonesia
Indonesia took about 770,000 barrels of Russian crude at Balikpapan at the end of June, the first cargo under the supply deal struck with Moscow in April at the peak of the Hormuz crisis, per customs data cited by Bloomberg.
Indonesia produces roughly 600,000 barrels a day against consumption near 1.6 million. Discounted Russian barrels finding a permanent Southeast Asian home means those barrels stay in the global pool rather than shutting in. That's mildly bearish crude, and it partly offsets the Goldman case.
What to watch
Whether Gulf producers keep restarting shut-in wells with tankers under attack, and whether the diesel crack widens on lost Russian refining runs. The crude flat price may tell you less than the distillate spread over the next two weeks.