How much oil is really getting through the Strait of Hormuz?

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**Kimberly Adams** (0:31)
Inflation is still well above the Fed's target. And how much oil is really getting through the Strait of Hormuz?
From Marketplace in Washington, I'm Kimberly Adams. The Commerce Department just released the July Personal Consumption Expenditures Price Index. Core PCE, the Fed's preferred inflation measure, was up 3.3% compared to last year. Marketplace's Nancy Marshall-Genzer joins me with more. Good morning, Nancy.

**Nancy Marshall-Genzer** (0:55)
Good morning.

**Kimberly Adams** (0:56)
So the PCE has been higher than the Fed's inflation target of 2% for more than five years. What's going on?

**Nancy Marshall-Genzer** (1:04)
Well, there are still stubborn pockets of inflation. And Kimberly, I talked to Ben Ayers about this. He's a senior economist at Nationwide. And he says there are two main causes of current inflation in core PCE, the number the Fed watches most closely, which strips out volatile food and energy prices.
One cause is the massive AI buildout. Ayers says skyrocketing demand for computer chips has pushed up prices for consumer electronics like cell phones.

**Ben Ayers** (1:33)
Higher prices for Apple and other key electronics coming through because they have to pay a lot more for the chips and the memory prices. And we're seeing a modest increase in consumer costs there.

**Nancy Marshall-Genzer** (1:46)
Ayers says the second cause of inflation in the core PCE is tariffs. He says there's some bleed-through of tariff costs, especially for products made out of metal because of President Trump's import taxes on steel and aluminum.

**Kimberly Adams** (2:00)
So how does all of this affect what the Fed might do at its next meeting on interest rates next month?

**Nancy Marshall-Genzer** (2:05)
Well, Ayers thinks the Fed will leave interest rates unchanged in September. But remember, we still have some data coming in before then, including the all-important August jobs report.

**Kimberly Adams** (2:17)
And later this week, we're going to get the University of Michigan's final consumer survey for August.

**Nancy Marshall-Genzer** (2:23)
Right. And this is something the Fed also watches closely, because if people lose faith in the Fed's ability to control inflation and they expect inflation to rise, say, 3% a year, retailers will raise prices by 3% and workers will demand raises to keep up.

**Kimberly Adams** (2:40)
Marketplace's Nancy Marshall-Genser, thank you, Nancy.

**Nancy Marshall-Genzer** (2:43)
You're welcome.

**Kimberly Adams** (2:44)
Turning to the Middle East, the US says our forces in the region have been keeping oil traffic flowing through the Strait of Hormuz. But independent trackers can't seem to account for all of it. The Wall Street Journal's Georgi Kantchev looked into the discrepancy. He joins me from Dubai. Georgi, welcome.

**Georgi Kantchev** (3:01)
Hi there.

**Kimberly Adams** (3:02)
How much oil does the United States government say is getting through the Strait of Hormuz these days?

**Georgi Kantchev** (3:07)
Right, the US government says that around 8 to 9 million barrels a day are coming out of Hormuz every day, which is a considerable amount, especially given that there's also oil coming to other bypass pipelines. So if you take that as a true number, we're pretty close to the levels that were coming out of the Gulf before the war. So if that number is correct, then the global market has a lot of oil coming out.

**Kimberly Adams** (3:38)
And what did your reporting find in terms of whether that number is correct?

**Georgi Kantchev** (3:43)
Well, we found that the government is putting out these numbers, around eight to nine millibars a day. These are the latest that they put out. They're saying, they have obviously the US Navy in the region, so they can see everything that's coming in and out. Independent companies that track these things, these are shipping monitors that look at satellite images, they look at the radio frequencies. They cannot account for all that. They find that there is oil coming out, a considerable amount, but it's not 8 or 9 million. They can find all the way between 2 to 6 million. So again, these things, the US, the trackers do acknowledge that the US has a bigger picture here and is better informed, but at least independently, the number cannot be, as of today, cannot be completely recognized. Now, 2 to 6 million is still a considerable amount, but it's just that right now with the oil market, the global oil market operating with a shortage, every million counts.