Brent is holding near $115 as attacks on shipping around the Strait of Hormuz have escalated more sharply in October than at any point since the US-Iran war began. Oil markets anticipate rising hostilities ahead of the November 3 US midterm elections, even as Qatar and Pakistan try to mediate.
Oil markets are counting down to the November 3 midterm elections with expectations of impending hostilities rising into next month. Qatar and Pakistan are seeking to mediate between the Trump administration and Tehran, which is temporarily capping the upside for ICE Brent at $115 per barrel.
Hormuz attacks top 30 incidents in October
October has seen the most acute escalation in maritime attacks since the war started eight months ago. More than 30 incidents have been recorded in the Strait of Hormuz and surrounding waterways, up from 14 in September.
The latest target was a crude tanker in Iraq's exclusive economic zone. That suggests Iran is hitting more than the tankers that try to transit Hormuz quietly. VLCCs, the largest crude tankers, account for 28% of drone and missile attacks in the Persian Gulf, and the 32 affected ships make up almost 4% of the global VLCC fleet.
Freight rates from the Gulf also remain elevated. A Saudi Arabia-China voyage still costs around $33 per barrel, while regional demurrage rates have risen since mid-August to $1,000,000/day.
Saudi-Houthi fighting adds pressure
Meanwhile, the Saudi-Houthi conflict appears to be gaining self-sustaining momentum. Yemen's Houthis claimed a ballistic missile strike on Saudi Arabia's 550,000 b/d Ras Tanura refinery, which caused a fire and disrupted operations at the kingdom's largest plant. An earlier March attack shut the refinery for three months.
On the supply side, OPEC+ is expected to hold December output targets steady at its Sunday meeting. Its seven core members are shifting their focus to 2027 production quotas after completing the roll-back of 1.65 million b/d of voluntary cuts.
Source: Oilprice.com
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