Crude Prices Surge as Iran Deal Falls Apart and Hormuz Remains Bottleneck

Crude oil prices have surged by 5.91% this week, with October WTI futures trading at $86.31 on Thursday. The increase follows a disappointing development: Iran and Washington have failed to reach an agreement, and the Strait of Hormuz remains restricted.

The Strait of Hormuz is crucial for global oil trade, accounting for about one-fifth of total consumption before the war. However, recent data from Kpler shows that shipping traffic through the strait has been severely limited, with only a handful of vessels passing through on Saturday and Sunday.

Saudi Aramco has resumed some loadings from within the strait and offered cargoes through transfers off Fujairah, while Chinese companies have begun collecting crude outside the Gulf. These measures have helped prevent a complete supply breakdown but have not restored momentum to the restricted supply system.