Middle East Oil Exports Recover to 89% of Pre-War Level; US Treasury Yields Continue Hitting New Highs | Finance Brief

Middle East Oil Exports Recover to 89% of Pre-War Level, Refined Product Gap Remains Significant

A Sept. 29 JPMorgan report shows that the 10-day average of total Middle East oil exports has rebounded to 20.5 million barrels per day, equal to 89% of the pre-war level in 2025. JPMorgan's commodities research team judges that the crude oil market has largely normalized. ^[1] But the recovery is uneven: crude flows have rebounded to 17.5 million bpd, recovering to 98% of pre-war levels; refined product exports are only 3 million bpd, just 58% of pre-war levels. ^[1] On the demand side, India's crude imports from the Middle East and "unknown origins" rose to 2.8 million bpd in September, up sharply by 1.2 million bpd from August, and have exceeded the 2025 full-year average. ^[1] Traffic through the Strait of Hormuz has approached recent highs from late June, at about 13 million bpd; VLCC charter rates linked to Hormuz have approached a record high of about $1.27 million per day. ^[1]

US Treasury Yields Continue Hitting New Highs as Crowded Shorts and Falling Oil Prices Intertwine

On Tuesday, the 30-year US Treasury yield touched a 24-year high at 5.564%, and intraday reached 5.621%, the highest since June 2002; the 10-year Treasury yield closed at 5.256%, also the highest close since 2002. ^[4] Oil prices fell notably that day, with Brent crude futures down 2.6% at $102.59 a barrel, but this failed to stop Treasury yields from rising. ^[4] Short positions continued to pile up. In the week ended Sept. 22, asset managers added more than 100,000 10-year Treasury futures short contracts, one of the largest weekly increases since 2023; 5-year contracts saw position increases in 11 of the past 12 trading days, while 10-year contracts expanded for 13 of the past 14 trading days. ^[6] Economists surveyed by Bloomberg forecast September nonfarm payrolls growth of about 90,000, a sharp slowdown from the unexpected 162,000 in August. ^[6]

Internal Fracture in US Stocks: Index Resilient, Breadth Worsens

Rich Privorotsky, head of Goldman Sachs' single-delta trading desk, said the pace of rising US Treasury yields "has become too severe to ignore," and the one-month rise in real rates is among the worst since 2013. ^[2] Goldman Sachs estimates pension funds will sell nearly a record $33 billion in stocks by month-end, while CTA systematic strategies will net sell more than $5.3 billion in Russell 2000 futures over the next week. ^[2] BTIG strategist Jonathan Krinsky noted that over the past month, the S&P 500 was roughly flat overall, but the median stock fell 4.5%, with the index's stability entirely dependent on about a 10% gain in semiconductors to offset losses. The Nasdaq 100 has also been nearly flat since mid-August, but only 10 of its constituents have risen more than 10%, while as many as 23 have fallen more than 10%. ^[2] Mid-cap stocks have quietly fallen below their 200-day moving average, down more than 8% from recent highs; the number of new lows on the NYSE has exceeded new highs for 10 consecutive trading days. ^[2]

Private Equity Giants Bet $5.3 Billion on Off-Grid Power for AI Data Centers

This summer, an investment consortium led by Blackstone, with KKR and Apollo participating, reached an agreement with pipeline giant Williams to acquire a 49% stake in five natural gas power projects under development for $5.3 billion; these projects are designed to provide off-grid power to data centers. ^[3] Williams said its first 200 megawatts of off-grid generation capacity came online less than 18 months after commercialization; by contrast, Fitch Ratings estimates that newly built grid-connected power plants and high-voltage transmission lines typically take 5 to 10 years. ^[3] Other paths are also being pursued in parallel. In May, Blackstone and Halliburton jointly announced a $1 billion equity investment in VoltaGrid; last fall, Bloom Energy announced that Brookfield Asset Management agreed to provide up to $5 billion to finance future power projects for AI data centers, and in June, Bloom announced that Brookfield would expand the potential financing to $25 billion. ^[3] In July, project developer Industrial Development Funding and Oaktree Capital announced a joint $1.7 billion investment to install Bloom fuel cells at a Nebius data center. ^[3]

AI Demand Diverges: Token Usage Surges, Hardware Price Signals Diverge

JPMorgan's Sept. 29 report noted that OpenRouter platform token usage surged 71% month over month in September, and 30 times year over year; overall spending rose 28% month over month and 14 times year over year. ^[5] The core growth driver came from open-source models. Open-source model usage surged 83% month over month and 101 times year over year, significantly faster than closed-source models' 39% month-over-month and 10 times year-over-year growth; closed-source models' share of total usage fell to 27% from 33% in August. ^[5] On hardware prices, rental prices for A100 and H100 both fell month over month, while B200 rebounded slightly after its first decline in August; DRAM spot prices posted their first modest month-over-month decline in September after five consecutive months of gains, while NAND prices were basically flat. ^[5] In September, the volume-weighted average price (VWAP) fell 25% month over month and 55% year over year, but overall token spending still accelerated. ^[5]

Market Analysis

The current market focus is on the dual pressures of rates and energy: long-end US Treasury yields have hit multi-year highs, short positions are crowded, and any weakening in economic data or dovish signal from Fed officials could trigger short covering; although oil prices have retreated in phases, investors' confidence in the geopolitical situation is fragile. US equity indices appear resilient on the surface, but internal breadth is deteriorating. Demand across the AI supply chain remains strong, but surging token usage coexists with falling unit prices, diverging GPU rental prices, and declining DRAM prices. The recovery in Middle East oil exports is uneven, with crude near pre-war levels while the refined product gap is significant. Private capital is accelerating into off-grid power for AI data centers, but contract duration mismatch is a core risk. ^{[1][2][3][4][5][6]}