Crude Holds Weekly Gain as Hormuz Attacks, Sanctions and Hurricane Isaias Tighten Supply
Brent held above $100 a barrel on Friday even as prices eased on signs Washington will not strike Iran before the November midterms, after a wave of tanker attacks cut Strait of Hormuz traffic to a two-month low. WTI stayed near $91 as US Gulf producers shut in about 1.3 million barrels a day ahead of Hurricane Isaias, while fresh US sanctions targeted 17 vessels moving Iranian crude.
Brent crude futures fell 72 cents, or 0.7%, to $103.53 a barrel by 0220 GMT on Friday, while US West Texas Intermediate slipped 52 cents to $90.97, according to a Reuters report carried by CNA. The pullback followed comments from US President Donald Trump that Washington was holding productive discussions with Iran and had no plan to attack before the 3 November congressional elections. Both benchmarks remained on track for weekly gains after settling about 4% higher on Thursday, when a surge in attacks on Middle East shipping drove the complex sharply higher. OilPrice.com had Brent at $102.83 and WTI at $90.33 earlier in the session, still above where the week opened.
The physical disruption behind the rally is concentrated in the Strait of Hormuz, which carried roughly a fifth of global oil and fuel shipments before the war. Kpler counted only seven commodity carriers transiting the strait on Tuesday, the lowest since late July, with crude crossings down 27% from the prior week to at least 10.1 million barrels a day. A US Navy-led joint information centre recorded at least 12 attacks on tankers carrying crude, LPG and LNG between 28 September and 2 October, and Iran was reported to have struck a vessel in the Gulf of Oman, where Saudi Arabia conducts ship-to-ship transfers. Washington added to the pressure on Thursday with fresh sanctions on individuals, networks and 17 tankers moving Iranian crude, fuels and petrochemicals.
A second supply risk emerged closer to home. Hurricane Isaias approached the US Gulf of Mexico, forcing producers to shut in about 1.3 million barrels per day, or 62.9% of current output in the region as of Thursday, according to the US Marine Minerals Administration cited by Reuters. Freight markets have accentuated the tightness: record-high rates for Persian Gulf routes and a growing shortage of available tankers have pushed physical delivery premiums higher, while ship-to-ship transfers have drained vessel availability elsewhere. Refiners are now weighing heavy Atlantic Basin sour crude availability against tightening Middle East medium grades, leaving the Brent-WTI spread near $12, the upper end of its three-month range.
Outside crude, the gas and coal complex stayed firm. Platts JKM LNG front-month traded at $25.95/MMBtu on Friday, little changed on the session but well above the high-USD-10s range seen in May, while Newcastle physical coal held at $144.55 a tonne, according to EnergyReader. Asian LNG imports fell to 20.09 million tonnes in September from 22.27 million tonnes a year earlier after the near-$30/MMBtu price spike priced out cost-sensitive buyers across emerging markets. European storage remains the swing factor, with EU inventories held at 36.6% of capacity against a seasonal norm of 55.0%, a gap that has kept European utilities outbidding Asian buyers for Atlantic cargoes.