Crude climbs past $91 Brent on Trump Iran threat as EPA hands 18 refiners full RFS exemptions
Brent crude traded at $91.48 and WTI at $86.97 Monday evening, both up more than $1 from earlier in the day, after President Trump threatened to "smack" Iran following the first exchange of fire in weeks. Tanker traffic in the Strait of Hormuz is already showing the strain. For jobbers, a move on the barrel works its way into the wholesale gallon, and it lands fastest on diesel.
Diesel inventories
Distillate stocks are near a 20-year low and prices are rising into it. Haulers should watch this one closely. Thin inventory means any refinery hiccup or a cold snap moves the rack hard, and there is little cushion to absorb a crude spike on top of it. If Hormuz stays open and the Iran threat cools, diesel could ease. If it doesn't, the low stock number gives prices room to run.
The RFS exemptions
EPA ruled Monday on 34 small refinery exemption petitions for the 2025 compliance year. It granted 18 full exemptions, 11 partial (50%) exemptions, denied three, and found two ineligible. That is a friendly outcome for the small refiners who filed, and it pulls a chunk of renewable volume obligation out of the pool. Fewer obligated gallons can soften RIN prices, which feeds back into blend economics for gasoline and diesel. Watch where RINs settle over the next few sessions.
Venezuela and the refiners
Trump announced Friday the U.S. secured majority control over Venezuelan fields holding more than 65 billion barrels, and said it would lower pump prices "long into the future." Venezuela's heavy crude does suit the Gulf Coast refineries built for it. More heavy barrels help those refiners' feedstock slates, but that does not translate straight to cheaper gasoline. Trump also gathered U.S. refiners to press them on prices. Supply access and retail price are different problems, and the second one runs on crack spreads and demand, not reserve announcements.
Permian plumbing
Enbridge is buying Salt Creek Midstream's crude gathering business for $600 million, taking full ownership of the Orla and Wink North systems and a 50% stake in Delaware Crossing. It tightens the link from Permian production to export docks. More export capacity out of the Permian keeps barrels moving to the coast, which matters for domestic supply balance over the medium term.
What to watch
Whether Hormuz traffic holds and the Iran threat stays talk or turns into strikes. Where RIN prices settle after the SRE decisions. And whether the diesel stock number keeps falling into fall demand, because there is no room left for a surprise.