Brent settles at $117.64 for December as Strait of Hormuz shipping risks mount
Key Facts
Brent December futures settled at $117.64 a barrel on October 30, up 2.4% during the session after touching $118, according to a report cited by Reuters. The December contract expired that day, while the more active January contract settled at $113.43. The difference in settlement prices means the $117.64 price applies to an expired contract, not the active-month contract. West Texas Intermediate settled at $104.12 a barrel, according to EL7 data. Brent December recorded its highest settlement since the end of April, while WTI’s close was its highest since September 15, according to the Associated Press.
The settlement came as shipping risks in the Strait of Hormuz returned to the market’s focus following maritime incidents in the region. The UK Maritime Trade Operations agency reported that a vessel was struck by an unknown projectile south of Lavan Island and said its crew was safe, according to the Associated Press. Oman also said it had evacuated 25 crew members from a Panama-flagged tanker that came under attack and caught fire 1.6 nautical miles off the coast of Musandam Governorate. It was unclear whether the tanker incident was connected to Iran’s account of other tankers. The Associated Press quoted Iran’s Revolutionary Guard as saying that a supertanker carrying more than 2 million barrels was hit by a sea mine and caught fire while using an unauthorized route, but said it could not verify the Iranian accounts.
Transport and insurance costs heighten crude’s sensitivity to shipping risks even as some production disruptions ease. The U.S. Energy Information Administration said tanker charter rates reached record levels in September, attributing this to higher insurance costs. The agency expected average crude production shut-ins due to supply constraints to reach 4.8 million barrels per day in September, down from 5.8 million in August. The indicator had peaked at 10.9 million barrels per day in May. The decline in shut-ins offers one part of the supply picture, while shipping costs and transit risks remain separate factors in the market’s assessment.
Brent began October below $97 a barrel, then rose 3.1% on October 23 to $116.72, its highest level since June 2022, according to the Associated Press. As part of efforts to manage supply shortages, the International Energy Agency’s governing board said on October 15 that member countries had released about 330 million barrels from emergency stocks, with about 100 million barrels still scheduled for release. The plans include more than 20 million barrels of diesel. On commercial supply, two of three ship-tracking firms reported that Saudi crude exports rose in October compared with September, according to Reuters. These developments show stock releases and increased Saudi exports coinciding with continued risks to shipping routes.
The Energy Information Administration raised its forecast for the average Brent spot price in the fourth quarter of 2026 to $105 a barrel, up $14 from the previous month’s estimate. The agency said the ongoing conflict could keep crude flows through the Strait of Hormuz and alternative routes volatile, potentially making short-term price volatility greater than its forecast reflects. In its later estimates, it expected average Brent to fall to $87 a barrel in the second quarter of 2027, then to $74 in the fourth quarter. Seven key OPEC+ members are scheduled to meet on November 1 to review oil market conditions. The Energy Information Administration is scheduled to release its next Short-Term Energy Outlook on November 10.