Brent Climbs Back Above $100 as Hormuz Tanker Attacks and Gulf Storm Tighten Supply

Brent crude was trading at $102.50 per barrel, up more than 2% from the previous close, while West Texas Intermediate changed hands at $89.96, a gain of 1.90%. The move reversed an earlier dip driven by the International Energy Agency, which is meeting to decide how to start releasing the 100 million barrels of crude and fuel stocks that the G7 agreed last week. Traders noted the release is not new supply but part of a March plan to draw down some 400 million barrels, so it has largely been priced in already.

The immediate driver was security. Data from a US Navy-led information outlet showed a dozen attacks on shipping between September 28 and October 2, the highest weekly count since the start of the war, and flows through the Strait of Hormuz fell to their lowest since late July. Analysts said producers appear willing to accept the risk of damaged vessels because there is no alternative route to get crude to international markets, a shift from earlier episodes when attacks prompted Gulf exporters to cut loadings.

Supply was also curtailed in the Atlantic basin. Chevron began evacuating personnel from all of its Gulf of Mexico platforms as a tropical storm approached, with roughly a quarter of US Gulf oil production shut in. The combination of disrupted loadings and storm-related outages arrives as Atlantic Basin product balances are already tight: Shell said its third-quarter refining margin nearly doubled sequentially to a record, and industry data showed US crude inventories fell by 2.09 million barrels in the week ending October 2.

The net effect is a market trading a security premium rather than a spare-capacity premium. A coordinated stock release would add barrels at the margin, but it does nothing to reopen Hormuz or to restore Gulf loadings, so any price relief from the IEA decision is likely to be limited and short-lived unless attack rates fall or the storm track spares producing infrastructure.