WTI hits $104.94 as threats to shipping persist in Hormuz
Key Facts
West Texas Intermediate crude rose to $104.94 a barrel during Tuesday's session, according to Reuters, as threats to commercial shipping persisted in the Strait of Hormuz. That marked crude's highest level since September, with the security of shipping remaining central to oil market developments. In early trading, the most-active December contract was trading at $98.08 a barrel, according to the agency's report on the start of the session. That contract was down 46 cents, or 0.47%, in those dealings. Tuesday's moves coincide with the expiry of the November contract, while December has become the most actively traded contract.
Reuters cited Iranian officials as saying Tehran was using new tactics to target vessels passing through the Strait of Hormuz. The Joint Maritime Information Center said the threat to commercial shipping in the strait remained classified as "severe," according to the agency. U.S. Energy Information Administration data show oil flows through Hormuz reached 14.9 million barrels a day in the first quarter of 2026. They then fell to 4.9 million barrels a day in the second quarter of the same year. On tanker movements, Kieran Gallagher, Vitol's head of Asia, said last week that about 80 very large crude carriers were engaged in shuttle operations through the strait.
In Asia-bound crude trading, Reuters cited traders as saying ADNOC had sold cargoes to buyers in China and India on a delivered basis. Under that arrangement, the company bears the shipping costs of delivering the crude to buyers, according to traders who spoke to the agency. On the diplomatic front, Abbas Araghchi said Iran's offer to reopen the Strait of Hormuz was "still on the table." Tehran's proposal requires the lifting of the U.S. blockade on its ports, according to Reuters. The conditions also include lifting U.S. sanctions on Iranian oil exports, alongside the demand to end the port blockade.
In response to supply disruptions, the Group of Seven agreed on October 2 to release 100 million barrels from emergency reserves, according to Reuters. The volumes covered by the agreement include diesel and crude oil, combining fuel and raw material in the emergency intervention. The agreement called for releases to begin immediately, without delaying implementation to a later date. It set the duration of the releases at 4 months, according to details of the agreement reported by the agency. In a subsequent update dated October 15, the International Energy Agency's Governing Board confirmed that about 330 million barrels had already been released as part of the emergency intervention.
On demand, the International Energy Agency forecast a year-on-year decline in global oil consumption in its October report. It estimated that demand in the final quarter of 2026 would fall by 2.5 million barrels a day compared with the same period a year earlier. For the full year, the agency forecast an average annual decline of 2.6 million barrels a day. On production, countries participating in the OPEC+ meeting decided to keep required production for November unchanged from their chosen reference level. The OPEC statement identified that reference as the required production level for September 2026.
On upcoming supply measures, the International Energy Agency's Governing Board pointed in its October 15 statement to additional plans for diesel stocks. These plans include releasing more than 20 million barrels of the fuel as quickly as possible. In the United States, the weekly petroleum inventories report is usually published on Wednesday, according to the U.S. Energy Information Administration's schedule. The administration set the usual publication time at 10:30 a.m. U.S. Eastern Time. After that, OPEC+ will hold its next meeting on November 1, 2026, to review market conditions, according to the date given in the organization's statement.