Brent Holds Above $100 as Hormuz Tanker Traffic Slumps and Isaias Shuts 71% of US Gulf Output
Crude benchmarks held a weekly gain with Brent above $100 a barrel as attacks on shipping cut traffic through the Strait of Hormuz to a two-month low, while Hurricane Isaias knocked almost 1.46 million barrels a day of US Gulf of Mexico production offline.
Brent crude was trading at $102.83 a barrel and West Texas Intermediate at $90.33 in the session covered by OilPrice on October 9, both lower on the day but higher than where they opened the week. The gain came despite remarks attributed to President Trump about productive talks with Iran, which failed to ease supply concerns. Freight and physical differentials did the rest of the work: a growing shortage of tankers, driven by record rates for Persian Gulf routes and heavy use of ship-to-ship transfers, pushed physical delivery prices higher still.
Traffic through the Strait of Hormuz has deteriorated sharply. Analysts at Kpler counted just seven commodity carriers crossing the waterway on the Tuesday of that week, the lowest figure since late July, with crude transiting the strait falling 27% from the wartime high of the previous 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 oil, liquefied petroleum gas and liquefied natural gas between September 28 and October 2, and Washington added 17 tankers carrying Iranian crude, fuels and petrochemicals to its sanctions list during the week.
On the supply side of the Atlantic basin, Hurricane Isaias has become the dominant prompt risk. The storm has taken nearly 1.46 million barrels per day of US Gulf of Mexico crude production offline, equivalent to roughly 71% of regional output, after a rapid escalation that began with only 185,120 barrels per day shut in three days earlier. Shell, Chevron and BP were working to restore offshore production and redeploy personnel once the storm cleared. With global crude inventories already described as low, the combination of a Gulf outage and constrained Middle East loadings leaves little cushion in prompt balances.
The freight complex is amplifying the physical tightness rather than relieving it. Supertanker rates were reported at record levels as a large share of the fleet was tied up in ship-to-ship transfers outside the Strait of Hormuz, and Asian refiners were reported to be stepping back from US Gulf cargoes as the economics of the arbitrage collapsed. For refiners and traders, the practical effect is a widening gap between paper benchmarks and the cost of securing actual barrels, with prompt Brent structure supported by both a Gulf outage and a war-risk premium on Middle East loadings.