The tanker campaign in the Strait of Hormuz intensified Monday as UKMTO logged five separate incidents, including a projectile strike that set a tanker’s engine room on fire, bringing the tally to six vessels hit in or near the strait since Sunday. US Central Command said it redirected its 130th commercial vessel on October 5, disabled three non-compliant vessels, and destroyed drone boats operating in the corridor.
The physical oil market is absorbing the campaign without panic. Brent closed Monday at $100.32, down 1.9 percent, and WTI at $89.43, down 1.8 percent. Loadings are holding: Middle East exports topped pre-war levels for part of September and Kuwait is back to about 75 percent of prewar output as Hormuz transits rise. Saudi Arabia continues to discount aggressively to place crude in Asia, with Aramco’s November official selling price at minus $5.00 a barrel versus Oman/Dubai, the deepest discount since 2020.
The pressure is showing up where it usually does first: freight and insurance. War-risk premiums and rerouting are the marginal energy driver this morning, not inventories. Iraq arranged a tanker to move 2 million barrels past Hormuz in its first such operation in decades, and Saudi-backed forces claimed control of the Bab el-Mandeb Strait while Riyadh reportedly plans an assault on Houthi positions to break the Red Sea chokehold.
The US Strategic Petroleum Reserve sits at 283 million barrels, the lowest since October 1982 per EIA data, which constrains Washington’s ability to answer any diesel tightness with releases. The G7 plan floated October 2 to release up to 100 million barrels of diesel and crude faces market skepticism on that arithmetic alone.