Brent Tops $91 for Third Straight Session as Iran Vows "Fully Offensive" Posture, Trump Rules Out Extending Ceasefire

Tuesday, August 18, 2026 | 6:15 AM ET

Brent (October) $91.22 | WTI (September) $85.09 Brent +0.35, WTI +0.59, both on track for a third straight gain, touching their highest since July 30 and July 31 respectively. A senior Iranian official said Iran will shift to a "fully offensive" military posture as talks toward a permanent peace stall, while Washington ruled out extending the temporary ceasefire. A vessel was struck by an unknown projectile exiting Hormuz Tuesday, with a crew casualty reported; Saudi Aramco has resumed loading from inside the strait for the first time in weeks.

The combination of Iran's rhetorical shift and Washington's refusal to extend the ceasefire is a genuine hardening on both sides rather than the usual back-and-forth signaling. ING tied today's price support directly to Trump's decision not to extend the agreement alongside continued Hormuz security concerns, and DBS's Suvro Sarkar flagged the more important implication: the absence of any deal is now starting to shift price expectations further out, into the fourth quarter and even 2027, rather than just the near-term risk premium. That's a meaningful change in framing, from a market pricing weeks of disruption to one starting to price a structurally longer conflict. SEB's Bjarne Schieldrop's point adds an edge to that: Iran likely already has, or will soon have, the practical capability to fully halt Hormuz flow whenever it chooses, and it isn't simply sitting still waiting on new U.S. sanctions.

Saudi Arabia's resumption of loading from inside the strait is the most concrete de-escalation signal in today's data, even as the broader diplomatic picture worsens. Three Sinokor-operated VLCCs loaded 2 million barrels each from Juaymah and Ras Tanura between August 12 and 16, the first activity at those terminals in three weeks, and shipping data shows six more VLCCs could load from inside the strait later this month. Aramco is also now offering Arab Medium and Arab Heavy cargoes via ship-to-ship transfer off Fujairah, and separately off Oman near Sohar, specifically targeting Chinese refiners that prefer Aramco's heavier, higher-sulfur grades. That Oman offering is notable as a possible sign Saudi Arabia is starting to follow the UAE's shuttling model, moving crude to safer waters outside the strait proper for transfer rather than sending tankers the full distance through Hormuz. Seven Bahri-owned VLCCs floating off the UAE and Oman, with two more heading to Fujairah, support that reading.

The Sidi Kerir alternative route, by contrast, looks increasingly like it isn't working as intended. Volumes there are expected to hit roughly 670,000 bpd this month, up from zero over the prior three months, but that's a fraction of the 4 million bpd Yanbu handled before the Houthi blockade. Vortexa's Emma Li's read is direct: Chinese buyers specifically are unhappy with the longer voyages and higher freight costs, which is why the northern bypass hasn't scaled the way Saudi Arabia likely hoped. That's consistent with new data showing two of China's largest state shippers, COSCO and China Merchants Energy Shipping, have avoided both Hormuz and Bab el-Mandeb entirely since late July, together representing more than 100 VLCCs that handled roughly half of China's Middle East crude imports before the war. Instead they're loading via ship-to-ship transfers in the Gulf of Oman and off Fujairah, where volumes involving Chinese and Hong Kong-owned vessels surged past 600,000 bpd in June and July from essentially nothing in April and May. The economics explain the shift plainly: daily freight on the Oman-China route was assessed at $140,000 last Friday, translating to roughly $110,000 in daily margin per tanker versus $30,000 to $40,000 before the war, a nearly threefold increase that's making the longer, safer routing highly profitable even before accounting for risk avoidance.

China's refined product export data offers a useful read on how the domestic supply picture is normalizing, separate from the crude flow story. July exports rose 6.7% from June to 4.65 million metric tons, with diesel exports up 88% month on month and gasoline up 320% from June's depressed base, following Beijing's second consecutive month of eased export curbs in August that now allow volumes exceeding pre-war levels. Rising exports function as a precondition for eventual import normalization, since giving refiners access to higher-priced overseas markets is what incentivizes them to run harder and eventually pull in more crude, though it's worth noting most product categories, gasoline and aviation fuel included, remain well below year-ago export levels even after the recent rebound.

Top Developments

Iran Signals "Fully Offensive" Posture as U.S. Rules Out Ceasefire Extension

A senior Iranian official told Reuters Monday that Iran will adopt a fully offensive military posture given the stalled peace process, as Washington separately confirmed it would not extend the temporary ceasefire. Iran continues negotiating with Oman over Hormuz management and says a deal is close, though Trump responded to those talks with a threat to bomb Oman, a longstanding U.S. security partner. A vessel was struck by an unknown projectile while transiting outbound through Hormuz Tuesday, causing engine-room damage and a crew casualty; the Omani Coast Guard is assisting survivors. The Houthis separately said they attacked a Saudi military vessel and four escorts near Yemen's Mocha.

Saudi Aramco Resumes Hormuz Loadings, Expands Ship-to-Ship Offerings Near Oman

Three VLCCs loaded 2 million barrels each from Saudi Arabia's Juaymah and Ras Tanura terminals between August 12 and 16, the first loadings there in three weeks, with six more VLCCs provisionally scheduled to load from inside the strait this month. Aramco is also offering Arab Medium and Arab Heavy cargoes via ship-to-ship transfer off Fujairah and near Oman's Sohar, targeting Chinese refiners specifically. Sidi Kerir volumes are expected to reach about 670,000 bpd this month versus zero in the prior three months, still far below the 4 million bpd Yanbu handled before the Houthi blockade, with analysts citing high freight costs and long voyages as deterrents for Asian buyers.

Chinese State Shippers Avoid Both Chokepoints, Shift to Gulf of Oman Transfers

COSCO Shipping Energy Transportation and China Merchants Energy Shipping, together controlling more than 100 VLCCs that handled roughly half of China's Middle East crude imports before the war, have avoided both Hormuz and Bab el-Mandeb since late July in favor of ship-to-ship transfers in the Gulf of Oman and off Fujairah. Freight margins on the Oman-China route have risen to roughly $110,000 per tanker daily from $30,000 to $40,000 before the war. Separately, China's July refined product exports rose 6.7% from June to 4.65 million metric tons as Beijing's second consecutive month of eased export curbs took effect, with diesel exports up 88% month on month