Brent crude traded near $105.21 a barrel on Friday, down roughly 0.5–0.7% from Thursday’s $105.92 settlement, while West Texas Intermediate slipped about 0.8% to $97.20 yet remained on track for a weekly gain of almost 6%. The modest decline came despite the International Energy Agency’s agreement on 15 October to release more than 20 million barrels of diesel from emergency stocks and accelerate delivery of the remaining March emergency barrels.
The main reason is physical logistics. Oil flows through the Strait of Hormuz averaged about 11.62 million barrels per day in the week to 13 October, only about 68% of the 17.15 million-barrel baseline, according to Kpler. The shortfall of roughly 5.5 million barrels per day dwarfs the IEA diesel release, which is less than one day of global diesel demand and just over five days of US consumption. Analysts at Haitong Futures argued that emergency supply measures can only do so much while Middle East tensions remain unresolved.
Washington is also considering easing sanctions on some sanctioned “shadow fleet” tankers to lower record freight rates. However, Kpler estimates only about 24 of 160 sanctioned supertankers could realistically return to mainstream trade, and ING strategists Warren Patterson and Ewa Manthey noted that EU sanctions would remain in place, limiting the plan’s effect.
US inventory data reinforced the tight picture. The Energy Information Administration reported crude stocks fell by 8.6 million barrels in the week to 9 October, the largest draw since February, alongside a 2.5 million-barrel diesel draw, partly because of hurricane-related outages. Goldman Sachs has estimated Brent’s geopolitical risk premium at about $22 a barrel, the second-highest monthly level on record.
For broader risk assets, including cryptocurrencies, the key transmission channel is inflation. Energy contributed to hot September inflation data, and the Federal Reserve’s 27–28 October meeting is now in focus. A hawkish surprise or firmer dollar would create headwinds for risk markets, while a genuine de-escalation in the Gulf could ease that pressure.
