Brent Holds Near $103 as Trump Rules Out Iran Sanctions Relief and Hormuz Flows Stay Below Pre-War Levels
Crude steadied at the end of a volatile month after Washington signalled it will not ease sanctions on Iran, leaving Brent around $103 a barrel even as Kpler data showed Persian Gulf loadings recovering to roughly 77% of pre-war throughput.
Brent crude was trading at $103.13 a barrel and West Texas Intermediate at $89.53 on September 30, with both benchmarks set to close the month higher, OilPrice.com reported. Brent's monthly advance was the larger of the two at roughly $10 a barrel, while WTI was on track for a gain of about $3, leaving the Brent-WTI spread wide. Prices had dipped earlier in the week on reports that oil flows from the Persian Gulf had recovered to a level close to pre-war daily averages, but the move stalled as doubts grew over whether the recovery is sustainable.
Shipment data from Kpler showed Persian Gulf exports rebounding strongly this month, with transit through the Strait of Hormuz at 13.2 million barrels a day, or about 77% of pre-war levels, CNBC reported. An earlier Reuters report citing the same data source put Hormuz flows at 7.4 million barrels a day and total Middle East oil exports at 12.8 million barrels a day. UBS commodity analyst Giovanni Staunovo said that despite more vessel traffic through the strait, flows remain below pre-conflict levels, which keeps the market undersupplied and sustains the risk premium embedded in front-month pricing.
The policy signal hardened on September 28, when President Trump rejected a peace proposal Iran had tabled at the UN General Assembly, sending Brent to $107.24 and WTI to $94.10, according to OilPrice.com. Iran has conditioned any reopening of Hormuz on the United States lifting its naval blockade and oil sanctions and unfreezing Iranian funds, while Washington has refused both. The Wall Street Journal reported over that weekend that the administration was considering a resumption of military strikes once the November midterms are over, lengthening the horizon for disrupted trade.
Product-side policy is adding a second layer of uncertainty. WTI has repeatedly lagged Brent on reports that the federal government may institute a temporary ban on diesel exports, which would force refiners to cut run rates and leave more crude available domestically. Sugandha Sachdeva of SS WealthStreet said continued uncertainty over sanctions relief and negotiations is keeping a geopolitical risk premium embedded in prices, adding that improving supplies could cap further gains while renewed disruption or escalation could trigger another rally.