Morning Highlights: Brent at $79, Rising; Iran Fires Missiles Into Jordan as Escalation Widens; Russia Bans Diesel Exports After Refinery Attacks, European Diesel Margins Hit Record

Thursday, July 9, 2026

Brent (September) $78.87 | WTI (August) $74.23 Brent +0.85 (+1.1%), WTI +0.71 (+1.0%), off session lows with prices moving higher as this brief goes out. Iran has fired ballistic missiles into Jordan, with the U.S. Embassy in Amman issuing shelter-in-place guidance. War underwriters advising shipping companies to pause Hormuz voyages. Russia bans diesel exports until July 31 after Ukrainian refinery strikes; European diesel margins at record $60 per barrel. Iran fires missiles at Jordan as retaliation spreads across wider Middle East; U.S. Embassy Amman issues shelter-in-place alert; war insurers advising Hormuz voyage pause; Gulf flows now at 71% of normal, down from 83% peak before first tanker attack June 27; Hormuz flows at 42% of normal on seven-day moving average; Ukraine hits 25 Russian tankers this week.

Missiles in Jordanian airspace while this brief is being written. The conflict that has been cycling between escalation and de-escalation for four months is now drawing in another country with longstanding U.S. basing relationships. Jordan hosts U.S. military assets, and ballistic missile overflights of Jordanian airspace represent a meaningful expansion of the geographic scope of Iranian retaliation beyond the Bahrain and Kuwait strikes of yesterday. The market was already repricing higher on the Russia diesel ban and Hormuz flow deterioration. The Jordan development is not yet in the price.

The flow data from the Goldman analytical tracker published last night gives the clearest numbers on where things stood before this latest escalation. Gulf oil flows peaked at 83% of normal levels in the first 10 days after the MOU, driven by trapped tankers rushing to exit. They have since retreated to approximately 71% of normal as new tanker attacks deterred crossings. Hormuz-specific flows on a seven-day moving average are at 42% of pre-war normal - 8.3 million bpd against a pre-war norm of 20 million bpd. Iran's willingness, not transportation capacity, is the binding constraint. Empty tanker capacity near the strait is at 926 million barrels - more than enough to move the volumes if ships were willing to transit. They are not, and war insurers advising a pause on Hormuz voyages this morning will extend that reluctance.

Russia's diesel export ban is the second major supply shock hitting simultaneously and it has landed, as Sparta's Abhishek Kumar noted, at almost the worst possible time. Inventory draws from the Iran war had already left diesel stocks thin globally. Russia banning exports until July 31 - with Ukraine hitting 25 tankers in the Sea of Azov and Black Sea this week and multiple major refineries offline - removes a supply source that European and Asian buyers had been relying on more heavily precisely because Middle Eastern product exports were constrained. European diesel margins at a record $60 per barrel tell the immediate market story. Russian gasoline shortages are now severe enough that regional governors are appealing directly to Lukoil, Rosneft and Gazprom Neft to increase domestic supply.

Gulf crude production was still down an estimated 10.5 million bpd in June versus pre-war levels even after a month of partial reopening. With tanker attacks resuming and war insurers pausing Hormuz voyage recommendations, the partial recovery that brought flows to 71% of normal is at risk of reversing. The scenario in which the MOU holds, sanctions waivers are reinstated and shippers receive security assurances -- allowing flows to normalize by end of July through a 6.6 million bpd Hormuz ramp-up - looks considerably less likely this morning than it did 48 hours ago.

Top Developments

Iran Fires Ballistic Missiles Into Jordan, Escalation Widens Across Middle East

Iran fired ballistic missiles toward Jordan as this brief went to press, with the U.S. Embassy in Amman issuing an alert stating missiles, drones or rockets are in Jordanian airspace and directing personnel to seek overhead cover and shelter immediately. The strikes follow Iran's attacks on U.S. military sites in Bahrain and Kuwait on Wednesday and represent a further geographic expansion of Iranian retaliation following U.S. airstrikes on Iranian targets. Jordan hosts U.S. military assets and has longstanding security relationships with Washington, making missile overflights a more serious escalation than the Gulf-based exchanges of the prior 24 hours. The situation is developing and not yet fully reflected in prices as of this writing.

War Insurers Advise Hormuz Voyage Pause, Flows Deteriorating

Some war underwriters have advised shipping companies to pause Hormuz voyages while others are reviewing policy terms following renewed vessel attacks, insurance industry sources told Reuters Wednesday. Gulf oil flows peaked at 83% of pre-war normal in the first 10 days after the MOU as trapped tankers rushed to exit, then retreated to approximately 71% following new attacks. Hormuz-specific flows on a seven-day moving average stand at 42% of pre-war normal at 8.3 million bpd, down from a peak of approximately 10 million bpd shortly after the deal. Flow tracker data confirms Iran's willingness rather than transportation capacity is the binding constraint -- empty tanker capacity near the strait exceeds 926 million barrels, sufficient to handle the volumes if ships were transiting. Gulf crude production was still estimated down 10.5 million bpd in June versus pre-war levels despite a month of partial reopening.

Russia Bans Diesel Exports Until July 31, European Margins Hit Record

Russia banned diesel exports on Wednesday until July 31 to support its domestic fuel market after Ukrainian drone attacks on refineries caused fuel shortages and price spikes across Russia. Russian refinery outages are at 3.8 million bpd - over half of total refining capacity -- with runs down 2.0 million bpd year on year. Russian retail diesel prices are up 12% and gasoline up 10% over the past two months to all-time highs, with fuel shortages reported across nearly every region. Regional governors including the Lipetsk governor appealed to Lukoil, Rosneft and Gazprom Neft on Thursday to urgently increase supplies. Ukraine hit 25 Russian tankers this week in Sea of Azov and Black Sea strikes, with two vessels struck twice. European diesel margins rose to a record $60 per barrel following the ban announcement, with U.S. diesel margins at $75 per barrel. Russia's crude exports are up 1.1 million bpd year on year as damaged refineries redirect crude to export rather than domestic processing, while refined product exports are down 0.9 million bpd year on year led by diesel.

Two-Sided Flow Risk, But Downside Scenario Now More Prominent

Flow trackers flag two scenarios for Hormuz going forward. In the constructive case - negotiations continue, Iranian oil sanctions waivers are reinstated and shippers receive security assurances -- flows could normalize by end of July, requiring a 6.6 million bpd increase in Hormuz volumes from current levels. In the adverse case -- talks fail, tanker attacks escalate and the U.S. reinstates a full Iranian blockade - flows could deteriorate further from current 42% of normal levels. The events of the past 48 hours, including missiles in Jordanian airspace, war insurers pausing Hormuz voyage recommendations and the MOU declared over by Trump, have shifted the balance of probability toward the adverse case without yet fully pricing it.