Oil shock returns: Brent surges above $106 as Hormuz fears rattle markets
Seven-month surge underscores markets’ sensitivity to Gulf supply disruptions
Brent crude jumped to $106.60 a barrel, gaining $3.52, or 3.41%, as of 7.24am Friday in Tokyo on renewed concerns over the US-Iran conflict and the security of oil flows through the Strait of Hormuz pushed the global benchmark sharply higher.
Murban crude, a key benchmark for Abu Dhabi and the wider Gulf, rose to $117.60, up $4.52, or 4%.
West Texas Intermediate (WTI) was comparatively steady at $94.51, down 10 cents, or 0.11%. Natural gas fell to $3.188, down 10.9 cents, or 3.31%.
The mixed movement reflects a market focused less on broad energy demand and more on the location and security of physical crude supplies.
Divergence: Brent jumps while WTI lags
OilPrice.com data shows Brent trading at a substantial premium to WTI. The spread was about $12.09 a barrel, a sign that international markets were assigning a higher risk to seaborne and Middle Eastern supplies than to US domestic crude.
Brent had recently fallen below $100 after reports of US-Iran contacts, the partial restart of Saudi Arabia’s East-West pipeline and signs of recovering Gulf exports.
On Sept. 23, Brent was quoted near $98.49 while WTI traded around $89.28.
By Sept. 24, however, Brent had climbed to roughly $102.33 in broader market data, while WTI rose to about $93.96. Friday's spike indicates that the risk premium accelerated again in the following session, as per Trading Economics.
Hormuz remains the trigger
The Strait of Hormuz remains central to the oil market’s anxiety. Iran has said the waterway will not fully reopen unless Washington meets its conditions, including demands linked to the U.S. naval blockade.
Although oil continues to move through the strait, tanker traffic remains far below normal. Shipping companies are using cautious routes, ship-to-ship transfers and other workarounds while insurers price in the risk of attacks, mines and sudden restrictions.
That uncertainty directly affects Brent because the benchmark reflects global seaborne supplies. WTI, by contrast, is more heavily influenced by US production, inventories, domestic refining demand and pipeline logistics.
Saudi exports provide partial relief
Saudi Arabia has been restoring exports after drone attacks disrupted its East-West pipeline, also known as Petroline, and suspended crude shipments from the Red Sea port of Yanbu.
The pipeline has restarted at reduced rates, and Aramco is working to restore throughput toward roughly 4 million barrels per day.
The route is strategically important because it allows Saudi crude to bypass Hormuz. Saudi Arabia has also increased loadings from Gulf terminals and used ship-to-ship transfers near Oman to keep cargoes moving.
MarineTraffic reported that six VLCCs loaded nearly 12 million barrels at Ras Tanura and Juaymah on Sept. 21, while separate tanker-tracking data put the day’s loading at about 14 million barrels on seven VLCCs.
Those measures have prevented an immediate global supply shock, but they do not eliminate the vulnerability.
Gulf cargoes still face maritime risk, and Red Sea routes remain exposed to Houthi attacks.
The seven-month price story
The latest move comes after an extraordinary period of oil volatility.
March: Brent rose above $100 as the conflict and Hormuz restrictions began to affect supply expectations.
June and July: Ceasefire hopes and diplomatic signals briefly reduced the risk premium.
August: Prices strengthened again as negotiations stalled and Iranian officials threatened a more offensive posture.
Sept. 10-16: Brent climbed above $107 after attacks on shipping, Saudi infrastructure and alternative export routes.
Sept. 21-23: Oil fell sharply toward $98 as U.S.-Iran contacts and the Petroline restart eased supply fears.
Sept. 24-25: Brent rebounded above $106 as markets reassessed the durability of diplomacy and the security of Hormuz.
Brent was up about 49% from a year earlier at one point in late September, according to Trading Economics data, while WTI had also climbed sharply from its late-August levels.
