Written Commentary
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
Trump Rejects Iran Offer, Mideast Flows Reach War-Era High
- Mark Bowman
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CRUDE OIL
November Crude Oil was higher early Monday after President Trump over the weekend rejected Iran’s offer to reopen the Strait of Hormuz (if certain conditions were met). He did indicate that he expected US negotiators to engage in more talks this week. Perhaps Trump feels he has the upper hand given the reports of a recovery in Middle East that Crude oil exports this month, estimated at 12.8 million barrels per day, the highest since the war started in February, according to data from Kpler. This is still about 6 million bpd down from 18.8 million bpd in February, but it is a vast improvement. Exports via the Strait of Hormuz are set to hit about 7.4 million bpd this month. A total of 19 very large crude carriers, carrying 2 million barrels of Saudi oil each, exited the Strait of Hormuz last week, and these figures exclude any vessels that might have crossed the strait with their transponders turned off.
PRODUCTS
November RBOB was near unchanged early Monday following a steep selloff on Friday, while ULSD prices were moderately higher. Managed money traders have a large net long in RBOB and an inconsequential net long in USLD. There has not been much reported on the suggested US diesel export ban since President Trump said he backed such an idea last week while the Secretary of Energy said it was unworkable. If the ban were to go into effect, US diesel prices would drop, but once supplies became abundant, storage would fill, encouraging a slowdown in refinery operations and putting upward pressure on gasoline prices.
NATURAL GAS
Once again the natural gas saw a sharp rally that quickly got overblown. Last week November Natural gas traded to its highest level since early July on news that a major pipeline in Appalachia had sent out a force majeure notice to customers, indicating a need for “an immediate pressure reduction” on a portion of the line. The estimated impact was 1.8 billion cubic feet per day, and this news appeared to spark a wave of short covering in the futures. The market gapped lower early Monday, putting it back inside a two month trading range.
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