Key facts
- US oil inventories fell by 8.56 million barrels for the week to October 9.
- Daily average oil flows through the Strait of Hormuz dropped to 11.62 million barrels in the week to October 13.
- ING analysts questioned the availability of shadow fleet tankers due to existing use and EU sanctions.
Crude oil prices were poised for a weekly gain as ongoing Iranian attacks in the Strait of Hormuz and a substantial US inventory draw of 8.56 million barrels impacted the market. Brent crude was trading at $105.48 per barrel, and West Texas Intermediate at $97.40 per barrel.
ING's commodity team noted that uncertainty in the Middle East and concerns over oil flows through the Strait of Hormuz have led the market to price in a significant risk premium. However, they suggested that a sustained pickup in flows could lead to a reduction in this premium, contingent on an agreement between the US and Iran.
Kpler reported that Iranian strikes had sharply reduced oil flows through the Strait of Hormuz, with daily averages dropping to 11.62 million barrels in the week to October 13, down from a baseline of 17.15 million barrels. The International Energy Agency (IEA) announced an inventory release of 100 million barrels, part of a larger emergency release. President Trump also proposed lifting sanctions on some shadow fleet tankers to address record-high freight rates.