Hormuz Shipping Data Points to Tighter Crude Flows and Higher Oil Prices
Oil prices continued to rise on Monday, driven by renewed US-Iran tensions and constrained shipping through the Strait of Hormuz. The average number of vessels crossing the strait over the past 10 days was around 10 per day, the lowest level since May, with just two vessels transiting on Saturday and six on Sunday.
This has tightened the physical market and kept a geopolitical premium embedded in Brent and WTI crude oil prices. The US-Iran confrontation is likely to be prolonged, according to ANZ Research analysts, who point towards reduced Middle East oil flows returning to normal quickly.
Brent has become the clearer gauge of the Middle East supply premium due to its greater exposure to global seaborne crude flows. OPEC+ maintained its production levels for October, leaving no room for a fresh near-term increase to offset disruptions around Iran and Hormuz.