Key facts
- Brent crude traded above $106 a barrel.
- Global commercial oil stocks are near minimum operational levels.
- Tanker freight rates have reached all-time highs.
- Iran has increased attacks on vessels in the Strait of Hormuz.
- US diesel prices remain above $6 per gallon.
Brent crude has risen above $106 a barrel as escalating attacks on tankers in the Strait of Hormuz and dwindling global inventories are tightening the market. OPEC forecasts stronger demand for next year, but fundamentals are now outweighing talk, with physical realities driving prices higher.
Doubts persist about the return to pre-war oil flows, with some tanker-tracking outlets reporting significantly lower numbers of vessels crossing the Strait of Hormuz. Ship-to-ship transfers have increased, pushing freight rates to all-time highs, now accounting for nearly a third of cargo prices, up from less than 5% before the conflict.
Iran has stepped up attacks on vessels, with multiple tankers reportedly hit in recent weeks. Energy executives warn of a thinning cushion of emergency oil supply, with Aramco's CEO noting a loss of 3 billion barrels since the war began and global commercial stocks near minimum operational levels. The situation in fuels, particularly diesel, is described as worse, with reduced refinery capacity leading to record-high prices at the pump.