Energy Markets Rise as Tanker Security Fears Deepen in the Strait of Hormuz
Goldlaner.com – Oil markets moved sharply higher Thursday as a surge in attacks on commercial tankers and a steep decline in ship movements through the Strait of Hormuz heightened fears over energy supplies. The waterway remains a critical route for crude exports from the Gulf, and the latest disruption is raising concern for oil, diesel and natural-gas consumers far beyond the region.
Brent crude, the international benchmark, was up 4.8% at $105 per barrel at 8:30 a.m. ET after gaining more than 5% earlier in the session. US benchmark West Texas Intermediate rose by a comparable amount to $92.48 per barrel.
Shipping Traffic Falls to a Two-Month Low
Only seven tankers passed through the Strait of Hormuz on Tuesday, Kpler’s preliminary tracking figures showed. That was below half of the prior seven-day average and represented the lowest daily count since July 23.
The total may later be adjusted upward because some ships turn off identification equipment while navigating the strait in an effort to reduce their visibility. Even with more vessels making such “dark” crossings, the danger facing crews and cargoes has become increasingly clear.
Between September 28 and October 4, 10 tankers were attacked in the strait, Kpler said Thursday. The number exceeded the prior weekly record of six incidents. More crude has continued to leave the Gulf, but the attacks underscore how quickly operating conditions can change for shipping companies, insurers and energy buyers.
On Wednesday, a tanker said it had been hit by multiple projectiles, resulting in casualties, the UK Maritime Trade Operations agency said. Such incidents can delay voyages, force rerouting decisions and add costs throughout the fuel supply chain even when physical oil supplies remain available.
“There is a clear tug-of-war at the moment between improving supply from the region and lingering threats to supply,” commodities strategists at ING wrote in a note Wednesday.
“The only way to see prices trade sustainably lower is for lingering risks to be addressed,” they added.
Why Hormuz Matters for Global Fuel Costs
The Strait of Hormuz is a narrow but strategically important shipping passage connecting the Gulf with international markets. When tanker traffic drops or vessel safety deteriorates, traders often react quickly because a prolonged interruption could restrict the movement of crude oil and petroleum products.
The effect is not limited to crude prices. Costlier oil can feed into higher prices for transport fuels, industrial energy and household goods. Diesel is particularly important because it supports freight networks, construction equipment, farming and other commercial activity. A jump in diesel prices can therefore spread through the broader economy.
European energy markets reflected those concerns. Natural-gas prices in Europe climbed near their mid-September high earlier Thursday before easing back. European diesel futures also remained under pressure after a strong move the previous day.
ICE Gasoil Futures, a widely watched European diesel benchmark, ended Wednesday 6% higher. The rise followed a statement from the International Energy Agency that member governments would not add to the 400 million barrels of oil previously agreed for release in March.
Emergency Stockpiles Remain Available
Governments in the IEA system have already released roughly 325 million barrels from emergency reserves, while about 100 million additional barrels are still scheduled to reach the market. Those remaining volumes include diesel supplies that Group of Seven countries agreed to release last week.
“IEA Member governments still have significant levels of publicly held emergency oil stocks – equivalent to around 1.1 billion barrels, including over 200 million barrels of diesel,” the Paris-based energy body said.
“The IEA stands ready to release more of these stocks to the market if and when required.”
Emergency inventories can help soften a supply shock, but they do not remove the underlying risk posed by continued threats to ships using a major export corridor. Markets will be watching whether tanker traffic recovers, whether attacks continue and whether exporters can maintain regular shipments.
Hurricane Adds Pressure on US Energy Operations
Supply worries were also being amplified by Hurricane Isais as it moved toward the US Gulf Coast, an area central to American refining operations. Shell and Chevron said they would reduce production in the region and move nonessential personnel away from offshore facilities.
A major storm can disrupt crude production, refinery operations and port activity. Refineries convert crude into gasoline, diesel and other fuels, making Gulf Coast conditions especially important at a time when global energy markets are already sensitive to supply risks.
At US gas stations, average diesel prices were slightly lower Thursday at $6.28 per gallon, compared with the prior day. The nationwide average price for regular gasoline was unchanged at $4.36 per gallon, AAA data showed.
Those retail figures had not yet mirrored the full scale of the latest market move. If higher crude and diesel futures persist, fuel costs could face renewed upward pressure. For households and businesses, the key question is whether the shipping threat and hurricane-related disruptions prove short-lived or develop into a more durable strain on global energy supplies.
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