July 14 — Escalating tensions in the Middle East have once again led to the closure of the Strait of Hormuz for the second time in months, creating what the market now calls a "zipper‑like" pattern of repeated shutdowns and reopenings. At the same time, Russia's diesel export ban continues to reverberate. The combination of these two supply shocks has triggered violent swings in global energy markets and lifted China's energy and chemical futures across the board.
Hormuz Closes Again, Market Enters "Zipper‑Like" Shock Phase
On July 11, the United States launched its third round of military strikes against Iran this week. Iran retaliated, and the Islamic Revolutionary Guard Corps Navy announced the closure of the Strait of Hormuz in the early hours of July 12.
On the night of July 13 into the early morning of July 14, multiple explosions were again heard near the southern Iranian port of Bandar Abbas, further heightening regional tensions. Shortly after, the U.S. announced the reinstatement of a naval blockade on Iran and proposed a 20% "transit fee" on goods shipped through the Strait of Hormuz, rapidly driving up risk aversion in the market.
Compared with the first closure in late February, the market is now far more concerned not about a one‑off suspension but about the Strait of Hormuz entering a repeated flip‑flop state of "closure – reopening – re‑closure."
With U.S. strategic petroleum reserves having fallen to about 326 million barrels and the floating crude previously released from reserves largely absorbed, the global crude supply buffer has noticeably weakened. Every shift in the Strait's status now threatens to amplify oil price and feedstock price volatility almost immediately.
Crude Leads Gains, Energy and Chemical Futures Rally Broadly
International crude oil surged first. WTI August futures rose 9.42% to close at $78.14/bbl, while Brent September futures gained 9.59% to settle at $83.30/bbl. China's domestic crude futures followed suit, rising more than 8%.
The fuel oil complex also strengthened, with low‑sulphur fuel oil and asphalt both rising over 6%, and high‑sulphur fuel oil moving up in tandem.
Chemicals saw a broad‑based rally. Polypropylene jumped nearly 7%, ethylene glycol gained over 6%, while LPG, plastics, styrene and propylene all rose more than 5%, and methanol advanced over 4%. As of the morning close on July 14, almost all energy and chemical varieties – crude, fuel oil, LPG, asphalt, plastics, ethylene glycol, styrene, etc. – posted gains.
Russia's Diesel Export Ban Further Tightens Global Supply
Beyond the Middle East, Russia's diesel export policy continues to stoke market anxiety.
As the world's second‑largest diesel exporter, Russia suspended diesel exports entirely from July 8, with the ban lasting through July 31. Previously, Russia had already restricted gasoline and jet fuel exports, widening its curbs on refined product shipments.
In response, the U.S. diesel crack spread has climbed rapidly from about $60/bbl at end‑June to over $80/bbl. Data show that in the first 10 days of July, Russia's diesel exports had already fallen to an average of 234,000 b/d, and the supply contraction is now transmitting to global markets.
The Strait of Hormuz closure affects crude transportation, while Russia's export ban hits product supply – the two parallel tracks are jointly compressing global energy supply and magnifying market risks.
South Korean Refiners Accelerate Exports, Asia‑Pacific Trade Flows Are Shifting
With Russian supply contracting, Asian refiners are stepping in to fill the international gap.
South Korea, the world's fifth‑largest refining country with a capacity of about 3.2 million b/d, exported a cumulative 188 million barrels of petroleum products in the first five months of this year, with diesel accounting for over 40%.
Industry expects that as Russian diesel supply dwindles, South Korean refiners' profitability will continue to improve. Companies such as SK Innovation and S‑Oil have already accelerated diesel exports, with some cargoes now being redirected to Europe and Southeast Asia.
For the Chinese market, the diversion of more South Korean refinery output to overseas markets also implies that exports of naphtha, mixed aromatics and other light chemical feedstocks may tighten, potentially raising import costs for related domestic raw materials further.
Against the backdrop of unresolved U.S.–Iran tensions and the ongoing Russian export ban, the global energy and chemical supply chain still faces significant uncertainties, with sharp price volatility likely to become the norm for the second half of the year.
