China's Teapot Refiners Slash Output As Hormuz Crisis Crushes Margins

Confirming our report from last Friday, Reuters reports that some independent refiners in China (also known as "teapots") are slashing their production rates as margins plummet to unprecedented negative levels, and demand weakens amid the continued paralysis of tanker traffic in the Strait of Hormuz.

China refiner margins (when Beijing tells you you can't raise prices, you don't raise prices). pic.twitter.com/DzZQoXqs5a

— zerohedge (@zerohedge) May 8, 2026

Citing unnamed trade and industry sources, Reuters reported today that the average operating rates at so-called teapots in Shandong had fallen to 50%, from 55% in April. What’s more, the operating rates of independent refiners are likely to fall further as the war drags on, and refiners swing into losses that the Reuters sources estimate at between $74 and $88 per ton of processed crude oil.

As a reminder, on Friday we reported that Chinese authorities ordered private refiners to maintain high levels of gasoline and diesel supply, even at a loss, or risk their crude import quotas being slashed if they reduce run rates. If the private refiners move to cut processing rates to preserve margins amid soaring crude prices, they would see their import quotas – handed out by the government in quarterly or semi-annual installments – reduced in the coming years, the officials warned. Instead, they appear to have aggressively reduced their import demands, leading to a big drop in Chinese oil imports.

Reuters confirms that it now appears teapots have run out of options and are risking lower quotas to manage their losses. “Without cutting output, the losses are unbearable,” one of the Reuters sources said.

Asia, the biggest oil demand center globally, is facing the greatest pain from the closure of the Strait of Hormuz. Overall, the war could force up to 6 million bpd cuts to crude runs across Asia in April, as refineries face severe supply disruption with 65% dependency on Middle East crude.

China is better insulated than its neighbous thanks to a stockpile of an estimated 1.4 billion barrels that has been accumulated over the past couple of years. Yet as OilPrice notes, this supply cushion is limited, so China is doing a fine balancing act of keeping the domestic market well supplied to avoid sharp price spikes, especially since China's economy is increasingly dependent on the well-being of its Pacific rim neighbors (and trading partners) who are far less insulated from surging oil prices. 

Tyler Durden Tue, 05/12/2026 - 18:50

Saudi Arabia Secretly Launched Attacks On Iran At Height Of Epic Fury

First it was revealed this week that UAE had directly attacked Iran in retaliatory strikes earlier in Operation Epic Fury, and now it has come to light that the Saudis did the same, and in multiple strike operations.

Reuters reports Tuesday that "Saudi Arabia launched numerous, unpublicized strikes on Iran in retaliation for attacks carried out in the kingdom during the Middle East war, two Western officials briefed on the matter, and two Iranian officials said."

KSA military file image

"The Saudi attacks, not previously reported, mark the first time that the kingdom is known to have directly carried out military action on Iranian soil and show it is becoming much bolder in defending itself against its main regional rival," the report continues.

"The attacks, launched by the Saudi Air Force, were assessed to have been carried out in late March, the two Western officials said," Reuters notes further. One of the sources described this military actions as "tit-for-tat strikes in retaliation for when Saudi [Arabia] was hit."

The revelation suggests that even as the Trump White House tried to present this is a very limited war, or even a mere US "excursion" - as Trump previously said, it was on the brink of spiraling into an all-out regional war involving Gulf allies hitting back directly at the Islamic Republic.

By and large the Gulf allies relied solely on the US and Israel to pummel Iran during the prior 38 days of heavy bombing which marked the peak of Operation Epic Fury.

This as the Gulf absorbed the bulk of Iran's retaliation. Iran sent hundreds if not thousands of ballistic missiles and drones on Gulf energy, infrastructure, and even central areas of cities.

It had remained at the time an open question of whether countries like Saudi Arabia, UAE, Qatar and Kuwait would actually then go on the offensive. It seems that to some degree they did, and the public didn't know about it.

Neither the Saudis nor Emirates have publicly acknowledged direct attacks on Iran, and per the new Reuters reporting Tuesday:

Saudi Arabia has meanwhile sought to prevent the conflict from escalating and has stayed in regular contact with Iran, including via Tehran's ambassador in Riyadh. He did not respond to a request for comment.

The senior Saudi foreign ministry official did not directly address whether a de-escalation agreement had been struck with Iran, but said: "We reaffirm Saudi Arabia's consistent position advocating de-escalation, self-restraint and the reduction of tensions in pursuit of the stability, security and prosperity of the region and its people."

Iranian officials declared they were primarily targeting US assets and military bases, and further vowed to 'punish' these countries for ever hosting American bases in the first place.

But this new info showing that the Saudis and UAE in had already in effect joined the US military campaign marks yet more evidence of escalation. The ceasefire meanwhile seems effectively dead at this stage. NBC is now reporting the Pentagon actually considering re-naming Iran war ‘Sledgehammer’ if ceasefire collapses.

Tyler Durden Tue, 05/12/2026 - 18:00

The Slide From 'Minnesota Nice' To Assaulting Journalists

Authored by Matt Cookson via RealClearPolitics,

Minnesota wasn’t always a fixture in the national news cycle. Now, it seems every month there is a new headline about Minnesota. This time, it involves a mob of protestors assaulting a conservative journalist. If Minnesotans want to end the trend of political violence plaguing their state, they must take a stand against incidents like these.

Last month, Savanah Hernandez, a journalist with TPUSA, was mobbed and assaulted while filming an anti-ICE protest in Minneapolis. Hernandez makes a living covering controversial events, so documenting this protest is nothing new for her. Things took a turn, however, when protestors assaulted Hernandez, shoving her several times, driving her to the ground.

By all accounts, it was merely Hernandez’s presence and reputation that drew the ire of the protestors. Nothing reported as of yet indicates she was the instigator of any violence. I won’t go into Ms. Hernandez’s views, because they couldn’t be less relevant to the issue at hand: There is no justification for what happened to her at that protest. Free speech and freedom of the press are foundational rights of our republic. Ms. Hernandez should not fear violence for coverage of an event that any journalist would cover. Her assailants should be held accountable to the fullest extent possible.

Unfortunately, political violence in the Land of 10,000 Lakes is nothing new. Beyond the violence of the past weekend, Minnesota has become a hotbed for this type of thing. Renee Good was tragically killed after physically obstructing ICE operations. She should still be alive today, yet this type of confrontation goes beyond typical First Amendment protests and heightens the risk of violent confrontation. The people of Minnesota have every right to voice anti-ICE opinions, but physical obstruction crosses a line. One that leads to unnecessary confrontations with law enforcement.

Yet Minnesota Gov. Tim Walz and Minneapolis Mayor Jacob Frey only make things worse through their frequent comparisons of ICE agents to Nazis and their threat to use the National Guard to interfere with federal agents.

Another example of this contempt for First Amendment freedoms came after a group of anti-ICE protestors stormed a church service they believed was led by an ICE agent. Not only did this group not tolerate disagreement, but they actively sought out people to intimidate. It’s one thing to be violent towards an attendee of a protest; it’s another to go into a church full of people who have nothing to do with the issue and impose your beliefs on them.

While the heat of this episode died down and ICE reduced its presence in the state, the assault on Ms. Hernandez suggests Minnesota’s political culture has markedly changed. Once known for its friendly “Minnesota Nice” culture, things have changed, especially in the past decade. The turning point for this change happened in the summer of 2020, when the death of George Floyd in Minneapolis sparked nationwide protests, rioting, and looting.

As a resident of the state during that time, I remember sitting in my parents’ living room, watching the city of Minneapolis in flames. How did Gov. Walz respond? Despite pleas from Mayor Frey, Walz waited to deploy the National Guard, allowing unnecessary destruction to take place. Frey asked Walz for National Guard help on Tuesday, June 2, but Walz didn’t deploy the guard until the following Friday; even then, it was only partially activated. The violence Walz permitted led to more than half a billion dollars’ worth of damage in what was the second most destructive riot in U.S. history.

This episode set the precedent that the Minnesota government would take a soft position on political violence, incentivizing people like those who attacked Hernandez to respond violently when faced with opposing views.

Thankfully, the rule of law is not dead in Minnesota. The family who assaulted Hernandez will be charged for their actions that day. To deter future incidents, the alleged assailants should be prosecuted to the fullest extent of the law.

More needs to be done to prevent future incidents like this. Although not responsible for the violence, Gov. Walz bears some of the blame for allowing this culture to fester. His term as governor is soon ending, and his successor must make clear that violence against political opponents will not be tolerated. Otherwise, incidents like this will happen more often.

Minnesota is well known for its natural beauty and friendly people. The attack on journalist Savanah Hernandez has called the latter into doubt. If Minnesotans don’t reject these incidents as antithetical to their values, violence will only increase. Minnesota must reject political violence and learn how to disagree respectfully.

Tyler Durden Tue, 05/12/2026 - 17:40

US Unleashes Another Wave Of Crude From Strategic Reserve As Gas Prices Soar

The U.S. government will loan 53 million barrels of oil from the Strategic Petroleum Reserve (SPR) to petroleum companies in a bid to relieve elevated gas and oil prices amid the conflict with Iran.

In a news release on Monday, the Department of Energy (DOE) announced it would release the crude oil from its sites in Louisiana and Texas to contribute to the International Energy Agency’s (IEA’s) move to stabilize the price of oil, which has often risen above $100 per barrel since the conflict started on Feb. 28.

As of Tuesday morning, the price for a barrel of Brent crude oil rose slightly to $108.

“Deliveries will begin immediately as the Department continues to move swiftly to address short-term supply disruptions and strengthen U.S. energy security,” the agency said in a statement, adding that petroleum companies “may begin scheduling deliveries immediately.”

The DOE, according to the news release, will “evaluate market conditions and operational capacity as it advances additional steps to meet the full United States commitment under the coordinated international release.”

Trafigura is taking the largest haul of nearly 13 million barrels, followed by Marathon and Exxon Mobil Corp, the US Energy Department said Monday.

Near-record volumes of government oil are flowing to market in a bid to rein in prices at the pump ahead of the busy summer driving season.

As Jack Phillips reports for The Epoch Times, participating petroleum companies can also use President Donald Trump’s usage of the Jones Act waiver, a federal statute that requires all goods transported by water between U.S. ports to be carried on American ships with American crews, to help “accelerate critical near-term oil flows into the market,” the DOE release said.

The DOE has already loaned around 80 million barrels from the reserve in recent weeks, bringing the total to 172 million barrels.

The U.S. government had agreed to that larger amount in March in a ​pact with more than 30 countries in the IEA to release about 400 million barrels.

The oil will be released between June and August, when refiners crank up as gasoline demand peaks.

The decision is an attempt to mitigate the price increases caused by the effective closure of the Strait of Hormuz, a key waterway through which about one-fifth of the world’s oil passes on a normal day. Iran has launched strikes and threatened commercial vessels in the strait, while it has also said it would create a legal framework to oversee the transportation of ships in the area.

Fatih Birol, the IEA’s director, has said the Iran war has created the biggest-ever energy ‌crisis.

If ⁠supply disruptions from the war persist, the agency is ready to release additional oil from strategic reserves, Birol said on May 7.

So far, member countries have released 20 percent of available reserves, Birol said.

“This is indeed the biggest crisis ​in history,” Birol told France Inter ​radio in an interview broadcast on April 21.

“The ⁠crisis is already huge, if you combine ​the effects of the petrol crisis and the ​gas crisis with Russia.”

The SPR, held in caverns at four sites ​on the coasts of Texas and Louisiana, currently holds about 393 million barrels.

The Trump administration committed to release 172 million barrels in a so-called exchange program, where oil is loaned to companies and must be returned in kind at a later date.

So far the US has agreed to release 133.1 million barrels.

It’s unclear if the energy department will hold another offer until it meets the 172 million-barrel target.

Not all the oil remains in the US. Part of it is being exported to Europe and South America.

The announcement from the DOE comes as Trump said on Monday at the White House that he rejected the latest peace proposal from the Iranian regime and signaled that a already-tenuous ceasefire between the United States and Iran is on “life support.”

Also on Monday, Trump said he would move to suspend the federal tax on gasoline in a bid to lower prices at the pump.

Tyler Durden Tue, 05/12/2026 - 17:20

Unearthed DOJ Files Implicate Hunter Biden In Potential Sex Trafficking Violations

Authored by Luis Cornelio via HeadlineUSA,

Newly released internal DOJ files appear to implicate President Joe Biden’s disgraced son, Hunter Biden, in alleged prostitution-related activity, corroborating accusations raised years earlier by Senate Republicans.

Hunter Biden / PHOTO: AP

The files, obtained Monday by the Senate Judiciary Committee and the Senate Permanent Subcommittee on Investigations, showed Hunter exchanging text messages with several women discussing payments, travel arrangements and extended meetings.

Some of the exchanges appeared to raise potential issues under the Mann Act. This federal law prohibits interstate prostitution and other sex trafficking-related offenses, according to Senate Judiciary Chairman Chuck Grassley, R-Iowa.

Notably, Grassley was among the Senate Republicans who previously warned in a September 2020 report that Hunter may have paid Eastern European women for prostitution or interacted with individuals potentially tied to a human trafficking ring.

The messages reviewed by Headline USA also referenced payment methods including Zelle, Venmo, Cash App and wire transfers.

In November 2018, Hunter appeared to have booked a flight for an unidentified woman from Los Angeles to an undisclosed location.

On March 22, 2019, a presumed woman told Hunter that a ticket cost $560. Hunter replied: “I’m going to send you money and you buy ok.”

Another message later stated: “Sent you 750 by cash app,” while a separate exchange read: “And I will have another 3K for you in cashmere [sic].”

Additional messages appeared to discuss payments tied to extended periods. In one exchange, Hunter appeared to ask how much an individual would charge for “an extra eight hours,” prompting the recipient to reply: “5000.”

Hunter also appeared to reference discounts for “anything over 4,” seemingly referring to hours.

In another exchange, after Hunter offered $9,000, the recipient replied: “9500 ok.” Hunter then responded he would “wire money at 2 pm all of it thanks love.”

Separate January 2019 messages showed a recipient repeatedly complaining that money had not arrived. Hunter replied that he had sent two certified checks to a New York P.O. Box address.

Other exchanges appeared to reference the availability of individuals in different parts of the country.

According to Grassley, the DOJ possessed the files but declined to pursue prostitution- or sex-related charges against Hunter.

Prosecutors instead focused on tax violations and false statements Hunter made on a federal firearm purchase form regarding his drug addiction.

Before leaving office, Joe Biden issued Hunter a sweeping blanket pardon covering any federal offenses potentially committed between January 1, 2014, and Dec. 1, 2024. This was the first time in U.S. history a sitting president issuing such a broad pardon to his own child.

Tyler Durden Tue, 05/12/2026 - 17:00