Oil prices jump amid record tanker attacks in Hormuz

Oil Market Rallies as Tanker Attacks Disrupt Hormuz Shipping

Activelifezero.com – Growing danger for commercial shipping in the Strait of Hormuz pushed oil prices sharply higher on Thursday, as traffic through one of the world’s most important energy corridors fell to its lowest level in more than two months.

Brent crude, the main international benchmark, briefly gained more than 5% before easing slightly. At 8:30 a.m. ET, it was still up 4.8% at $105 a barrel. West Texas Intermediate, the principal US benchmark, rose by a comparable amount to reach $92.48 a barrel.

The move reflects concern that supplies could be interrupted even as crude exports from the Gulf have increased. The Strait of Hormuz sits between Iran and Oman and is a crucial passage for seaborne oil and other energy shipments. Any sustained reduction in shipping activity there can quickly affect traders’ expectations for global availability and transport costs.

Transit Volumes Fall as Security Risks Intensify

Only seven tankers passed through the strait on Tuesday, preliminary Kpler figures showed. That total was less than half the seven-day average and represented the weakest daily transit count since July 23.

Initial shipping figures can rise later, since some vessels disable their identification equipment while navigating the area in an effort to reduce their visibility. These so-called dark transits have become more frequent, but they have not prevented a sharp increase in attacks on commercial ships.

Between September 28 and October 4, 10 tankers were hit in the strait, setting a weekly record and surpassing the prior high of six attacks, Kpler said Thursday. The attacks have put crews, cargoes and energy supply chains under greater pressure at a time when markets remain especially sensitive to disruption.

In the most recent incident, a tanker said it was hit by multiple projectiles on Wednesday, resulting in casualties. The UK Maritime Trade Operations agency disclosed the incident as shipping companies continued to weigh the risks of using the route.

“There is a clear tug-of-war at the moment between improving supply from the region and lingering threats to supply,” commodities strategists at ING wrote in a note Wednesday.

“The only way to see prices trade sustainably lower is for lingering risks to be addressed,” they added.

That conflict is central to the market outlook. More oil leaving the Gulf can help relieve pressure on supplies, yet the benefit may be limited if vessel movements remain constrained or if risks lead shipping operators to delay, reroute or reduce trips. Even temporary disruptions can influence prices when buyers are uncertain about how much crude can reach refineries on schedule.

Hurricane Threat Adds to Supply Concerns

Oil markets also faced another potential problem closer to the United States. Hurricane Isais was moving toward the Gulf Coast, an area that includes a major concentration of American refining capacity.

Shell and Chevron said they would reduce regional production and remove nonessential workers. A strong hurricane can affect offshore output as well as refining operations, creating a separate risk for fuel supplies. Refinery disruptions matter because crude oil must be processed into products such as gasoline, diesel and jet fuel before reaching consumers and businesses.

The combination of shipping attacks and storm-related precautions has heightened attention on the resilience of energy infrastructure. A loss of refining capacity along the Gulf Coast could tighten product markets even if crude remains available elsewhere.

European Energy Costs Rise

Higher crude prices were accompanied by gains in European natural gas and diesel markets, adding to concerns about inflation. Europe relies heavily on imported energy, making regional prices especially vulnerable when transport routes or global supplies appear at risk.

European benchmark natural gas prices approached the highs seen in mid-September earlier Thursday before retreating. ICE Gasoil Futures, widely watched as a European diesel benchmark, finished Wednesday 6% higher.

Diesel is particularly important across freight transportation, farming, construction and industrial activity. Price increases can therefore feed into broader costs for moving goods and providing services, potentially affecting household expenses beyond the price displayed at fuel stations.

The diesel rally followed confirmation from the International Energy Agency that its member governments would not add to the 400 million barrels of oil they agreed to release in March. Roughly 325 million barrels have already been released, while about 100 million additional barrels are still expected to enter the market.

The remaining volume includes diesel stocks that G7 nations agreed last week to release. The IEA said it would speed up those planned releases in an effort to bring more supply to market.

“IEA Member governments still have significant levels of publicly held emergency oil stocks – equivalent to around 1.1 billion barrels, including over 200 million barrels of diesel,” the Paris-based energy body said.

“The IEA stands ready to release more of these stocks to the market if and when required.”

Emergency reserves can help cushion sudden supply shocks, although they cannot fully eliminate the market impact of prolonged instability in major shipping lanes or damage to energy facilities. Traders will be watching whether the planned releases arrive quickly enough to ease pressure in diesel and crude markets.

US Pump Prices Remain Elevated

For US drivers, average diesel prices were slightly lower Thursday than a day earlier, standing at $6.28 per gallon. Regular gasoline was unchanged from the previous day at an average of $4.36 per gallon, based on AAA figures.

Retail fuel prices do not always move immediately with crude futures, since they also depend on refinery output, inventories, transportation costs and local market conditions. Still, a prolonged period of expensive oil or disruptions to refining capacity can eventually place upward pressure on prices paid by consumers.

For now, the market is balancing additional supply from the Gulf and planned emergency-stock releases against the immediate dangers facing tankers in Hormuz and the weather threat approaching the US Gulf Coast. The direction of oil, diesel and natural gas prices will depend heavily on whether those risks ease or deepen in the coming days.