Wall Street Warns About “Perfect Storm” Diesel Crunch: 

• Goldman’s Daan Struyven Shows Global Diesel Exports Crashing
• Citi’s Anthony Yuen Warns: Global Diesel Inventories “Below 5YR Minimum“
• BofA’s Francisco Blanch Warns: “Diesel’s Perfect Summer Storm” Unfolding 
• Jefferies’ Sam Burwell Warns: Hormuz Shock “Manifesting Itself In Cracks, Not Crude” 

Brent crude remains hostage to daily geopolitical developments in the Gulf region more than five months into the conflict, with muted traffic through the Strait of Hormuz (read the latest US-Iran wrap) constraining tanker flows and driving refined-product markets to new, dire extremes as they become the focal point of the energy crisis.

Brent briefly fell below $80 a barrel last week as prospects improved for an Iran-Oman deal to reopen the maritime chokepoint, before rebounding toward $90 as negotiations stalled this week.

Hormuz traffic has stabilized at about 10 crossings a day, down from 30 to 40 before the latest escalation. Liquids flows are averaging roughly 4 million barrels a day, well below public estimates of 9 million, according to HSBC analysts.

We earlier cited Jefferies analyst Sam Burwell, who warned clients:

“What this all shows is that global oil-market tightness is manifesting itself in cracks, not crude, at least for now. Wide cracks suggest refining runs should remain strong, however, which is positive for crude. 

By lunchtime Thursday, the front-month US diesel crack spread (HOCL1 on the Terminal) had exceeded the $97 level reached in mid-March, when the US-Iran conflict was just three weeks old, and was closing in on $100. That signals extreme tightness in diesel.

Diesel crack spread hits record high, just shy of $100 https://t.co/pxNKK1OUeR pic.twitter.com/uAciv62yPk

— zerohedge (@zerohedge) August 13, 2026

Francisco Blanch, head of commodities at Bank of America, warned clients in a note earlier titled “Diesel’s Perfect Summer Storm” that the industrial fuel is “materially disrupted in 3 of 4 major regions” around the world.

As we recently warned (see report: The crude reality of oil markets), supply disruptions are amplifying the squeeze on petroleum markets.

Three of the world’s four major refining hubs remain impaired for one reason or another.

First, the closure of the Strait of Hormuz and adjacent military activity has reduced Middle East fuel exports, with the recent Houthi strike on Saudi Arabia’s Jazan refinery being the latest example.

Second, record Russian refining disruptions following Ukrainian strikes have removed significant volumes from the global diesel pool. 

Third, fearful of potential domestic shortages, China has yet to restart petroleum product exports to the Asia region. As such, Europe has increasingly relied on record US exports to fill the gap.

Yet those flows are drawing down already tight US inventories, the only major hub open for business, creating a global competition for fuel that is pushing diesel cracks back toward record seasonal highs.

Beyond Ukraine drone-striking Russian energy assets, Moscow has decided to ban diesel exports; yet again, more evidence of dwindling global supplies: 

• Russia Bans Diesel Exports, Assuring Even Higher Prices

One month later, Diesel spreads hit all time high https://t.co/3GROS40xsr

— zerohedge (@zerohedge) August 13, 2026

Separately, Anthony Yuen, managing director and head of energy strategy at Citi Research, warned clients that global observed diesel inventories are “below the five-year minimum and not substantially lower than this,” adding, “The last time inventories were at a similar level was in 2022, when gasoil cracks globally were about $20/bbl lower than currently observed, and they were meaningfully lower in 2018.”

Goldman’s commodities expert Daan Struyven told clients earlier today:

Since the Iran war began, we have viewed the Hormuz shock as more disruptive for refined products, especially diesel, than for crude.

Near-record prompt diesel margins have already triggered a strong supply response from refiners with spare capacity, including higher utilization and a shift in yields toward diesel. As a result, outright diesel shortages still look unlikely this year.

Struyven showed that global diesel exports are crashing.

Kpler data suggest that Persian Gulf flows are down 80% year over year for diesel, versus 48% for crude.

BofA’s Blanch noted, “In short, absent a meaningful supply recovery, the diesel market appears poised to stay tight, volatile, and expensive well into next year.”

The clearest signal of how far the energy crisis has spread, even as Brent and WTI remain relatively calm, is now visible in refined-product markets, particularly diesel, where the blowout in crack spreads signals a severe global supply squeeze.

Hormuz Shock “Manifesting Itself In Cracks, Not Crude,” Jefferies Says

Brent crude futures held near recent highs of $90 a barrel before fading to around $87 early Thursday morning, as traders awaited progress toward reopening the Strait of Hormuz. Stalled US-Iran negotiations and tightening global fuel supplies continued to support prices and concern some top energy experts, who warn of a looming supply shock. 

US-Iran talks remain deadlocked to end the week as the Trump administration maintains its blockade of Iranian ports and Tehran demands compensation for war-related damage. Pakistan, which has served as a mediator, said the broader peace talks had stalled.

Late Wednesday, President Trump wrote in a Truth Social post that the USA has “total control” over the Strait of Hormuz and “I think we will keep it.” It’s also yet more confirmation that he’s opting for economic siege warfare while the US military campaign is on hold. 

Polymarket odds for “US-Iran 60-day negotiation period extended?“ currently stand at around 25%, down from 80% one week ago.

So far, Brent crude is headed for a weekly advance of nearly 5% as a near-term resolution to the US-Iran conflict remains murky and Ukrainian and Russian attacks on energy infrastructure tighten oil and, more critically, diesel markets.

Last week, our note titled “Winter Is Coming“ for Europe outlined how the energy-stricken continent faces a twin diesel and natural gas crunch.

Samantha Dart, co-head of global commodities research at Goldman Sachs, told Bloomberg TV early last week that the global diesel-supply crunch is “what keeps her up at night.”

Saxo Markets strategist Charu Chanana said volatility will remain elevated until Hormuz reopens and the outlook for production becomes clearer.

Making matters worse, the International Energy Agency released a report on Wednesday that forecast a 1.8 million-barrel-a-day deficit this quarter, more than double its previous estimate. The agency also warned that elevated prices are beginning to crush demand and projected the widest annual supply shortfall in five years.

Offsetting higher prices was bearish US inventory data showing that crude stockpiles surged by 17.4 million barrels last week, the largest increase since January 2023, as exports weakened and imports from Saudi Arabia and Venezuela increased.

Jefferies analyst Sam Burwell, who specializes in oil, gas and energy infrastructure equities, wrote in a note Wednesday that showed oil-market extremes in three charts:

Three Pictures Worth 1,900 Characters – Oil Market Extremes

We return from an earnings hiatus (and step outside Canada) to show some current extremes in global oil markets. Chinese crude imports bounced a bit in July but remain far below the prior run rate. While crude is well off its highs and never made a historic spike, diesel cracks are far above prior all-time highs (gasoline is strong, too). China remains the wild card, but we think this setup is constructive for crude (and, by extension, the Canadian energy complex).

Chart #1 shows monthly Chinese crude imports. The massive ~5 mmbpd downshift in imports following the Hormuz closure demonstrated the extent of China’s demand elasticity. July did see a ~1 mmbpd m/m increase from June’s low. With somewhat higher crude prices and fewer vessels moving through Hormuz more recently, we’ll see what August and beyond bring. However, we note that a return to the ~11 mmbpd five-year average would imply ~3 mmbpd of incremental demand.

Chart #3 shows that while diesel and gasoline prices are, of course, elevated, they are much closer to, or within, prior historical highs. Notably, clean-product prices in 2008 were similar to today’s on a nominal basis (and therefore higher in real terms).

What this all shows is that global oil-market tightness is manifesting itself in cracks, not crude, at least for now. Wide cracks suggest refining runs should remain strong, however, which is positive for crude. While US refinery utilization dipped w/w, it remains near 20-year seasonal highs.

China is the crude-demand wild card, but with such wide cracks, one wonders how long it will be before the Chinese begin importing more crude to export more refined products (or simply replenish their own product/petchem stocks). Imports in the coming months will be telling as to how elastic China’s buying remains.

In short, unless the Strait of Hormuz reopens soon and fuel supplies recover meaningfully, the focus will remain on refined-product markets, particularly diesel. The critical industrial fuel is being squeezed globally, and as Bank of America’s commodities team warned, “the diesel market appears poised to stay tight, volatile, and expensive well into next year.”

Professional subscribers can read a lot more energy content at our new Marketdesk.ai portal. 

Authored by Owen Evans via The Epoch Times,

The Treasury Department on Tuesday finalized a rule permanently exempting U.S. companies and individuals from reporting beneficial ownership information to authorities, rolling back Biden-era Corporate Transparency Act requirements.

“Today’s action is a victory for common sense and American small businesses,” Treasury Secretary Scott Bessent said in a statement on Aug. 11.

“President [Donald] Trump promised to cut red tape, and this final rule delivers. Treasury is eliminating a burdensome reporting requirement for millions of law-abiding business owners without compromising our national security.”

The original rules, implemented under the Biden administration, had applied to tens of millions of mostly small businesses.

The Corporate Transparency Act (CTA) is the 2021 law requiring shell companies to disclose owners, and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is the enforcer.

The new policy means that U.S. companies and U.S individuals no longer have to tell FinCEN who owns them.

However, foreign reporting companies will have to disclose beneficial ownership information for foreign individuals, the department said in a statement.

The Treasury Department said that FinCEN will also delete previously reported information by Americans from the government’s beneficial ownership information database.

FinCEN had previously implemented rules requiring certain companies to report beneficial ownership data as part of anti-corruption and anti-money laundering efforts backed by lawmakers and the Treasury Department under former President Joe Biden.

The latest move adopts the exemptions set out in the interim final rule issued in March 2025, part of a broader push by the Trump administration. At the time, the Treasury announced that it would not enforce the CTA against “U.S. citizens, domestic reporting companies, or their beneficial owners.”

Under the beneficial ownership information scheme, small businesses had to submit personal information about their beneficial owners, including name, address, birth date, and other information from a piece of identification such as a driver’s license.

“Having a centralized database of beneficial ownership information will eliminate critical vulnerabilities in our financial system and allow us to tackle the scourge of illicit finance enabled by opaque corporate structures,” then-Treasury Secretary Janet Yellen said in a statement about it in 2024.

Estimates suggested that the reporting requirement would have applied to approximately 32 million businesses, including corporations and limited liability companies.

Failure to comply would have come with sizable penalties.

Businesses and their owners faced civil penalties of up to $591 for each day they did not file. They could have also endured $10,000 in criminal fines and faced up to two years in prison if regulators found that businesses submitted false information or willfully did not file, correct, or update beneficial ownership information reports.

In May, the U.S. Government Accountability Office (GAO) released a report that recommended that the Treasury identify potential actions to address the risks posed by the domestic reporting company and U.S. person exemptions.

“Illicit actors frequently use corporate structures such as shell companies to launder criminal proceeds. These structures can be exploited because they allow the identities of people who benefit from or control them to be hidden from law enforcement,” it said.

It also said that Congress and law enforcement should be provided with “highly useful information that addresses these risks.”

Sen. Elizabeth Warren (D-Mass.), the top Democrat on the Senate Banking, Housing, and Urban Affairs Committee, said rolling back the reporting requirements increased the risk of organized criminal activity.

“This is a gift to cartels, criminals, and U.S. adversaries that exploit shell companies to move millions through our financial system,” she said in an Aug. 11 post on X.

“Secretary Bessent should testify in front of Congress to explain his decision to put our national security at risk.”

Andrew Moran and Reuters contributed to this report.

LIS Technologies just bought the building that makes the Nano Nuclear vertical-integration story look more like a fuel cycle, instead of a slide deck.

The check for $6.2 million purchased K-1580, a 37,803-square-foot, three-story, newly renovated facility at 150 Americus Way on the historic K-25 Enrichment Site of East Tennessee’s Technology Park Heritage Center in Oak Ridge, best known as the birth place of the Manhattan Project. It sits next to LIST’s leased K-1330 test-demonstration hall and complements the 206-acre “LIST Island” parcel where the company plans a $1.4 billion commercial laser-enrichment plant.

Jay Yu, Executive Chairman and CEO of LIST as well as Founder and Chairman of the publicly traded Nano Nuclear Energy, called Oak Ridge “the Silicon Valley of Nuclear.” For once the geography matches the org chart.

The stack Nano and LIST have been drawing looks like this:

Feedstock → laser enrichment → deconversion → fabrication → reactors → transport → space.

K-1580 is where the middle of that chain is supposed to live.

Christo Liebenberg, LIST president and co-founder, said the building will host a pilot plant for the company’s SMILE program (Stable and Medical Isotope Laser Enrichment), office space for more than 100 additional employees, industrialization of critical laser-enrichment components, and a UF6 deconversion pilot.

COO Lloyd Jollay was more specific about why deconversion is the point:

“The facility also offers dedicated laboratory space for investigating UF6 deconversion processes. Integrating deconversion capabilities with uranium enrichment will create a more comprehensive fuel cycle solution and address key needs expressed by a number of advanced reactor developers.”

Those reactor developers are not hypothetical, they sit in the same building.

Nano’s lineup is KRONOS (stationary high-temperature gas-cooled MMR, now in NRC construction-permit territory via the University of Illinois deployment), ZEUS (solid-core battery reactor), and LOKI (portable, being prepped for space). Nano bought Kronos and Loki out of Ultra Safe Nuclear’s bankruptcy at the end of 2024, then hired Ameresco to engineer them toward commercialization. The fuel those machines need is LEU for the existing US fleet and HALEU for the SMRs. That is exactly what LIST’s CRISLA-3G laser process is being built to make.

The two companies already have the contract language. Nano invested in LIST in 2024 with an enriched-uranium supply agreement. Under the collaboration, Nano is supposed to develop the upstream capabilities to feed LIST UF6, then take LIST’s enriched UF6 into an integrated fuel-manufacturing process so the same molecules can land in Nano’s cores, or be sold into the wider industry. Nano is also a key subcontractor on LIST’s DOE award: LIST was one of six names on the up-to-$3.4 billion LEU Enrichment Acquisition IDIQ, with Nano bringing the licensing and advanced-reactor paperwork. They are related parties through overlapping ownership and officers. Yu is the overlap that matters.

Put K-1580 into that map and the campus reads left-to-right:

1. K-1330 (leased demo) – LIST’s test loop. Tennessee already issued a radioactive-material license so they can bring in UF6 and run the laser. NRC engagement for classified-handling procedures is underway on the demo.
2. K-1580 (just bought) – SMILE medical/stable isotopes, UF6 deconversion pilot, Phase II enrichment in a prototypical environment, component manufacturing, 100 desks. The deconversion step is what turns enriched hexafluoride into something a fabricator, or a KRONOS, can actually use.
3. LIST Island (206 acres, former Duct Island) – the commercial LEU-3 / Project F.U.E.L. hall. Groundbreaking still targeted for 2026, subject to licensing, permitting, and a final investment decision. Commercial operations still “before 2030.”
4. Nano’s other pillars – fuel fabrication (still the stated intent, no site announced), Secured Transportation Services for moving the material, and NANO Nuclear Space, which wants ZEUS and LOKI in cis-lunar power and eventually propulsion.

Medical isotopes are not a distraction in this narrative. Hospitals need precursor stable and enriched isotopes; quantum and advanced electronics want the same separation physics. SMILE lets the laser earn its keep on non-weapons-grade product while the uranium line walks up the TRL ladder. LIST says CRISLA-3G is at TRL-4, about 75% of the way to TRL-5, and moving toward TRL-6. Phase 2 of the pilot is still the gate before anyone should pretend they have commercial enrichment economics. That is their language, not ours.

What this week’s check actually does is nail a street address onto the middle of the stack. Enrichment at K-1330, deconversion and isotopes at K-1580, commercial plant on LIST Island, reactors at Nano, logistics at STS, space at NNS. One chairman, one Oak Ridge campus, and a fuel molecule that is supposed to never leave the family.

Whether the NRC, DOE, and the fabricator that does not yet have a building cooperate is the next chapter, but at least the org chart is no longer the bottleneck. The physical campus is starting to look like the chart.

Following yesterday’s cooling (in-line) consumer price inflation data (driven in large part by energy deflation), US producer prices were expected to rebound modestly in July from a 0.3% MoM decline (headline) in June.

Instead, headline Producer Prices were unchanged MoM (cooler than expected), pushing the annual change down from +5.5% to +4.7% YoY…

Source: Bloomberg

Core PPI (Ex Food and Energy) also printed cooler than expected (+0.2% MoM vs +0.3% MoM), dragging Core PPI YoY down to +4.2%…

Final demand services: Prices for final demand services advanced 0.2 percent in July after rising 0.5 percent in June. The July increase can be traced to the index for final demand services less trade, transportation, and warehousing, which moved up 0.6 percent. Conversely, the indexes for final demand transportation and warehousing services and for final demand trade services decreased 1.8 
percent and 0.1 percent, respectively. 

• Product detail: Leading the July increase in prices for final demand services, the index for portfolio management advanced 6.5 percent. Margins for health, beauty, and optical goods retailing; automobiles and automobile parts retailing; lawn, garden, and farm equipment and supplies retailing; food and alcohol retailing; and food and alcohol wholesaling also moved higher. In contrast, prices for truck transportation of freight fell 1.8 percent. The indexes for machinery and vehicle wholesaling and for securities brokerage, dealing, and investment advice also decreased.

As stocks accelerate to new highs so portfolio management costs soar…

Final demand goods: The index for final demand goods fell 0.7 percent in July after moving down 1.4 percent in June. A major factor in the July decrease was a 3.1-percent decline in prices for final demand energy. The index for final demand foods moved down 0.9 percent. Conversely, prices for final demand goods less foods and energy increased 0.1 percent.

• Product detail: More than half of the July decrease in the index for final demand goods can be attributed to a 5.7-percent decline in prices for gasoline. The indexes for fresh and dry vegetables, diesel fuel, jet fuel, residual fuels, and thermoplastic resins and materials also fell. In contrast, prices for motor vehicles and equipment moved up 0.3 percent. The indexes for electric power and for grains also increased.

Energy remains a major driver of the deflationary impulse…

The full breakdown:

Goods deflated for the second month in a row while services rose for the second month in a row…

The recent rapid surge in memory prices has stabilized (but is not dropping)…

The CPI-PPI spread continues to (broadly speaking) signal increased pressure on corporate margins…

So, the bottom line is that energy price declines are now deflationary while soaring memory costs and stock portfolio management fees are driving aggregate prices higher…

So should The Fed pop the AI/Memory/Compute bubble? (in the same way it’s unable to impact a supply shortage in the energy markets)

Which overall means that the market is now pricing in LESS THAN ONE rate hike in 2026…

Rate-hike expectations remain flat from yesterday as today’s PPI merely confirmed the lack of pressure on Warsh to act with any urgency.

The number of Americans filing for unemployment benefits for the first time rose to 209k last week, rebounding off the lowest levels since 1969…

Michigan and New York saw the largest surge in initial jobless claims last week, while Puerto Rico and Ohio saw the biggest weekly declines…

Continuing jobless claims, however, dipped back below 1.8 million Americans, clearly trending lower again…

Combined with Friday’s disappointing payrolls print, the labor market appears to remain in the ‘no hire, no fire’ regime.

Top adviser to the commander of Iran’s Islamic Revolutionary Guard Corps, Mohammad Reza Naqdi, has been signaling Iran’s more aggressive stance in media appearances this week, also following a significant reshuffling of top military leadership.

“Look, we have to attain deterrence so that the enemy never dares to attack us, so we can live with security,” Naqdi said in an interview with PBS. “One way is to prolong this war until we get to the next term of the presidency and cause attrition, so that if anyone else wants to attack Iran, they will know there is a cost.”

Alluding to the recent military reorganization, he described: “Whenever the conditions are favorable and the order is issued, we must be able to take the operation into enemy territory” – while contrasting the approach with a pre-war doctrine “primarily based on defense and the preservation of the country.”

Military.com underscores that “Iran has reorganized its military to be more aggressive abroad as talks on ending the war with the U.S. remain mired in stalemate, a sign that Tehran is preparing for a protracted era of regional conflict.”

As a reminder, this is after Tehran’s obvious pivot away from negotiations, and toward a more permanent state of military resistance. The Wall Street Journal previously pointed out: “Now, the new supreme leader, Khamenei’s son Mojtaba, is putting his own stamp on the country’s national-security policy amid a confrontation with the U.S. that could last months or even years.”

According to more of the analysis:

In a sweeping overhaul of the government’s top echelon on Sunday and Monday, Iran named seasoned hard-liners to run the country’s security policies and institutions of repression.

It marked the most significant government reshuffle under Mojtaba Khamenei, who hasn’t been seen in public since the war began. U.S. intelligence agencies say he is alive but severely injured, and top Iranian cabinet members say they have never met him since he took office. Iranian officials say he was injured but in good health.

Analysts said the appointments signaled Khamenei’s determination to hold fast in a showdown with President Trump, who is seeking concessions on Iran’s nuclear program and the Strait of Hormuz. 

“The regime is preparing for a more confrontational posture at home and abroad,” said Kasra Aarabi, an expert on the Islamic Revolutionary Guard Corps, a powerful paramilitary force, at United Against Nuclear Iran, a policy organization that opposes Iran’s government.  

And some fresh insight from Michael Stephens, a senior associate fellow at the UK-based Royal United Services Institute (RUSI):

Nearly six months since the beginning of the war, Iran is now convinced that the US is not willing to conduct a ground invasion. “That existential threat is gone,” Stephens said. “So they want to up the tempo and maybe make the pain a little bit more acute for President Trump. And the best way to do that is to drag this out.”

Prior to the US-Israeli attack on February 28, the widely held belief was that the Iranian government would readily collapse, after enduring months of civil disobedience and unrest during major demonstrations in late December and January.

“That doesn’t seem to be the case now, and I’m not really sure the US has any tools in the bag to force the regime to do what they want,” the analyst said. Iranians can “live in this stalemate at the moment – it hurts them, but it’s not existential, and I think that’s the problem the US has now”.

Iranian leadership continues boasting of squaring up against the much larger American foe…

❗️ Iran says the US military is weaker than expected

“The longer this war continues, the more experience we gain.

We have never had a war like this to gain real experience and learn how to fight America.

Over these five months, we have learned this. We have also seen that the… pic.twitter.com/Yfz5T2pIkj

— NEXTA (@nexta_tv) August 12, 2026

In follow-up, and as if confirming all of the above, Iranian Brigadier General Rasoul Sanaei-Rad has on Thursday said Iran will act more aggressively in the future, the Fars news agency reported.

“We stood firm in the recent war and, God willing, we will stand firmer and more aggressively in a possible future war,” said Sanaei-Rad, a political adviser in the office of the supreme leader. He noted that Iran’s “enemy” is seeking to fracture the country through economic pressure, but that its plan did not succeed.

Below: Mohsen Rezaei, one of the longest-serving figures in Iran’s Islamic Revolutionary Guard Corps, has returned to the heart of Tehran’s national security establishment, after Supreme Leader Mojtaba Khamenei appointed him secretary of the Supreme National Security Council.

Iran’s Foreign Minister Abbas Araghchi also chimed on in on Thursday with a similar theme of Washington miscalculation. He asserted that the United States has “has long miscalculated due to intelligence failures,” especially when launching its war on Iran.

American military actions in the Strait of Hormuz were “an even bigger miscalculation,” Araghchi stated on X. “Worse than fake news is fake intelligence,” the foreign minister said, perhaps in mockery of Trump.

Wall Street analysts are finally waking up to Unusual Machines as a pure-play in the effort to anchor America’s sovereign drone supply chain. One-way attack drones and autonomous systems have forever changed modern warfare, forcing the Department of War to quickly fire up a massive procurement supercycle to stockpile these drones. 

We identified UMAC (read report) in mid-July as an NDAA-compliant drone-component manufacturer positioned to reap the rewards as the US government races to stockpile everything from one-way attack drones to interceptor drones.

Piper Sandler analyst Clarke Jeffries is the latest to identify UMAC with an “Overweight” rating and a $38 price target, citing the company’s potential in becoming a top domestic drone supplier for the military. 

“UMAC is a pure-play drone beneficiary focused on creating an NDAA-compliant source of domestic drone components to fill the multi-billion dollar void in the defense (& commercial) market created by DoW & FCC restrictions against drones and components coming from China,” Jeffries said. 

He continued, “While UMAC has made real headway in capturing the potential opportunity with the majority of down-selected Drone Dominance competitors as customers and ~100,000 sq. ft. of domestic manufacturing online by EOY, the company undoubtedly remains very early in their journey (headcount of only 240 today. ) While large scaling risks remain, ultimately the company’s hyper focus on the domestic market and early traction with vendors nets an attractive opportunity in our view. Initiating at OW. 

Jefferies outlined UMAC’s key opportunities:

Opportunity #1 

De facto supplier for the post-NDAA drone market. The acute near-term opportunity for UMAC is capturing the S-curve for domestically built drone components as small UAS products comply with new NDAA & FCC regulations on domestic material requirements. UAS components including motors, batteries, and drone imaging systems are predominantly manufactured in the China even for existing U.S.-based defense contractors. UMAC’s status as a U.S.-based supplier, especially in base components like motors, creates a privileged position for future UAS production contracts including “Drone Dominance” as the Pentagon mandates supply- chain compliance for future drone programs.

Opportunity #2

What about Commercial? Filling the void left behind by DJI. As the U.S. government moves to cultivate a domestic supply chain for the defense sector, the commercial sector has been swept up in similar protectionist policies to ultimately encourage broader commercial dual-use. To that end, in late 2025 the FCC added DJI (& similar Chinese companies) to the FCC’s ‘Covered List’, that being a register of technology that poses national security risk and therefore is banned from receiving new FCC authorization. While previously approved products remain on sale, this will create a multi-billion dollar market vacuum in the commercial market over the coming years. It remains too early to determine who the heir apparent to DJI is, but we know motors will be needed by whoever becomes the next dominant U.S. commercial drone vendor.

Next-generation opportunities: Counter-UAS & BVLOS.

Longer-term but promising opportunities include: a.) drone interceptors (using drones for defensive applications rather than strike or ISR) which will leverage the same components and b.) BVLOS: FAA currently restricts drones operating ‘beyond visual line-of-sight’ but changes to this rule are currently being debated. If successful it would significantly loosen requirements and enable new air traffic networks, opening the market for ‘Drones-as-a-Service’: e- commerce, food delivery, etc

Bull/Bear Scenarios

2030 Growth Thesis for UMAC

UMAC Is in the Early Innings of Becoming a Major Player in the US Drone Market

UMAC’s Focus Is on Producing Group 1 and Group 2 Drones

Product Portfolio

Scaling Timeline

Drone Market Problem: China Controls 70%

Another Problem: Approximately 90% of Finished UAS Components Are Still Manufactured in China

Nine Years of Legislation Systematically Eliminating Chinese Content From the US Drone Supply Chain

Department of War Target: 200,000 Drones

Competition

Bloomberg data show that all analysts covering UMAC rate the stock a “Buy,” with an average price target of $39.57.

Latest coverage on UMAC from mid-July:

• This American Drone-Motor Company Is Positioned For “Massive Procurement Tailwind”

Wall Street is finally figuring out how to profit from the reshoring of America’s drone supply chain and identifying the industry’s top players.

By Michael Kern of OilPrice.com

The world’s biggest sovereign wealth fund, Norway’s $2.3-trillion Government Pension Fund Global, posted a record-high profit of $185 billion for the first half of 2026, as Asian technology stocks boosted its returns and profit on the portfolio.

Norway’s Government Pension Fund Global (GPFG), which is commonly referred to as ‘Norway’s oil fund’ because it was created with oil and gas revenues, is a shareholder in many large companies in the world, with more than half of the value of its equity investments in the U.S. market. The Norwegian fund was created in the 1990s, and today it holds, on average, 1.5% of all listed companies in the world.

For the first half of the year, the fund posted a record profit on the portfolio before foreign exchange adjustments at 1.753 billion Norwegian crowns, or $185 billion, the fund’s manager, Norges Bank Investment Management (NBIM), said on Wednesday.

This is more than double compared to the profit for the first half of last year, amid a rally in technology stocks.

“The result is driven by good returns in the equity market, particularly from Asian technology stocks,” said Nicolai Tangen, CEO of Norges Bank Investment Management.

The investments in the Government Pension Fund Global returned a record-high 9.4% in Norwegian crowns in the first half of 2026, up by 0.22 percentage points compared to the return on the benchmark index. The fund’s value was 22.683 trillion crowns, or $2.39 trillion, as of June 30, up by 1.416 trillion crowns, or $149 billion, from the same time a year earlier.

Equity investments accounted for 72.1% of the fund’s value at the end of the first half of 2026, and fixed-income investments for 25.8%. Nvidia, Apple, and Microsoft are the most valuable investments of the Norwegian wealth fund.

The fund’s equity investments returned 13.0% in the first half of 2026, with telecommunications, technology, and energy delivering the strongest returns, NBIM said.

Earlier this month, NBIM told the U.S. Securities and Exchange Commission (SEC) that it doesn’t support its proposal to scrap outright current requirements for climate-related risks and disclosures.