WTI rises to $102.16 as shipping risks through Hormuz persist

Key Facts

West Texas Intermediate rose 40 cents to $102.16 a barrel by 09:18 GMT on October 27, after falling during the session. Reuters reported in an article published by MarketScreener that crude and the two main benchmarks recovered after trading 1% lower earlier in the day. The move puts crude above $100, but does not establish the price it reached on October 28, the date given in the first draft. In the previous session, crude fell to $101.16 a barrel on October 26, after ending the week through October 23 up 2.3%. The trajectory shows sharp swings over several days, as supply and shipping risks remained a focus for the oil market.

WTI was $101.16 on October 26, down $2.11, or 2.04%, according to a Reuters report published by Yahoo Finance. Crude had ended the previous week with a 2.3% gain, while Brent rose 6% over the same period. On October 23, Brent climbed 3.1% to settle at $116.72 a barrel. Prices had started the month below $97, according to the Associated Press, before reaching their highest level since June 2022 on October 23. Brent’s move offers a broader context for the volatility, but does not by itself explain each daily change in WTI.

The safety of navigation through the Strait of Hormuz remains a source of concern for oil flows from the Gulf. An Associated Press report published on October 22 said Iran reported that 7 oil tankers caught fire or were damaged during the night of October 21; the agency said it could not independently verify those claims. The report also said Lloyd’s List Intelligence recorded 28 attacks on vessels in October, the highest number since the start of the war, according to the report. The company said, however, that active Gulf operators were showing no signs of retreat. Oil tankers are moving through the strait under U.S. military protection, while a resumption of fighting could complicate deliveries of oil, natural gas and fertilizers from the region.

The strait’s scale matters to energy markets: oil flows through it averaged about 20 million barrels a day in 2024, equivalent to nearly 20% of global petroleum liquids consumption, according to the U.S. Energy Information Administration. In response to transit risks, Aramco Chief Executive Amin Nasser said the East-West pipeline’s capacity had risen to 7 million barrels a day from 2 million. The pipeline allows oil to be transported away from the Strait of Hormuz, according to the Associated Press. The International Energy Agency also said crude exports from Gulf producers, led by Saudi Arabia, increased by 4.4 million barrels a day to 13.9 million in September. Those exports exceeded 75% of prewar levels, indicating that some flows had been restored despite continued shipping disruption.

Supply risks coincided with a decline in observed global oil inventories, which fell by 10 million barrels in September, according to the International Energy Agency. At the end of the month, inventories were 509 million barrels below their level at the end of February. On October 15, the agency said its members had released about 330 million barrels from stocks and agreed to complete the release of about 100 million remaining barrels. On the demand side, the agency forecast that global consumption would fall by an average of 2.6 million barrels a day in 2026. It also projected demand would decline by 2.5 million barrels a day year over year in the fourth quarter.

The agency’s supply outlook points to a shift between this year and next. It expects global supply to fall by 5.8 million barrels a day to an average of 100.7 million barrels a day in 2026. In 2027, it expects supply to rise by 7.7 million barrels a day. On the political front, an Associated Press report said Benjamin Netanyahu’s opponents could win a majority in Israel’s parliament, but whether the disparate parties, including Arab parties, could form a government remained unresolved. A report published by FXStreet on October 27 said envoys from Saudi Arabia, Pakistan and Turkey arrived in Tehran on Monday to meet Iranian officials and try to prevent further escalation. The continuation of these efforts, alongside supply and demand forecasts, puts shipping developments and mediation at the center of the oil market’s near-term outlook.