A fresh wave of attacks and retaliatory strikes this week on tankers and other energy assets underscores the continued risk to energy exports from the Mideast Gulf. The escalations are particularly bad news for global products markets, which have tightened significantly over the six-month-old Iran war and face less surmountable supply challenges than do crude markets. In the Gulf, producers have spent the last decade expanding their downstream portfolios to extract more value from their crude. The strategy, while successful, has now become more expensive to defend — and left many buyers scrambling for supplies. Energy Intelligence estimates refined-product flows through the Strait of Hormuz averaged 760,000 barrels per day in August, about one-fifth of the 3.44 million b/d that shipped prewar. With product flows out of the Gulf so low, producers struggle to maximize the downstream investments they have made at a time when refining margins are at or near record highs: Amsterdam-Rotterdam-Antwerp diesel margins are near $90 per barrel, while the US diesel crack hit a record $108/bbl last week. "The war has turned downstream integration from a value-maximization strategy into a logistics test," a Gulf-based commodities trader told Energy Intelligence. "Producing the higher-value barrel is only useful if you can still deliver it to the customer." The trader added that a laden very large crude carrier (VLCC) takes on the same transit risk as a smaller products tanker, which means "every risky [products] transit evacuates far less energy value compared to crude."