Brent Crude Returns to $100 as Iran Tensions Revive Supply Concerns

Global oil benchmark has returned to the $100 per barrel mark as renewed concerns over the US-Iran conflict and security risks around the Strait of Hormuz reversed the benchmark’s recent losses.

As at the time of writing 5:15 am West Africa Time (WAT), Brent crude traded at $100.20 per barrel, gaining 1.92 per cent, while US West Texas Intermediate (WTI) rose 1.46 per cent to $91.84 per barrel.

The recovery followed Thursday’s rebound, which saw Brent gain 4.0 per cent to $98.38 per barrel and WTI rise 2.9 per cent to $90.65 by 3:15 pm Eastern Time. The gains ended a three-session losing streak after Wednesday’s sharp sell-off pushed Brent to a near two-month low.

The earlier decline reflected market expectations that the Democratic Party’s gains in the US midterm elections could pressure President Donald Trump’s administration to pursue a negotiated settlement with Iran. Such an agreement could ease tensions in the Gulf and improve oil flows through the Strait of Hormuz.

However, those expectations weakened as geopolitical risks persisted. Eurasia Group reduced its estimated probability of a negotiated agreement from 20 per cent to 10 per cent, while raising the likelihood of renewed US strikes to 60 per cent. Iran’s navy also reported that a tanker struck a mine east of the Strait of Hormuz and caught fire, renewing concerns about commercial shipping security.

Despite the geopolitical uncertainty, increased exports from major Gulf producers are easing pressure on the physical crude market. Shipments from Saudi Arabia, the United Arab Emirates, Iraq and Kuwait rose 10 per cent to 15.53 million barrels per day in October, according to tanker-tracking data compiled by Bloomberg.

Saudi Arabia’s exports increased 13 per cent to seven million barrels per day, including a 35 per cent rise in shipments from Yanbu to 3.07 million barrels per day. Iraq exported 3.35 million barrels per day, up 9.5 per cent, while Kuwait’s shipments climbed by a third to 1.44 million barrels per day.

The higher exports have pushed the Middle East physical crude market into surplus for the first time since July. Dubai crude for prompt delivery is trading below later-dated cargoes, a market structure known as contango, indicating that near-term supply is exceeding demand. The report also noted that tanker-tracking data showed no Iranian crude exports for a second consecutive month under the US naval blockade.

The latest price recovery therefore reflects a market balancing two opposing developments: persistent geopolitical risks around the Strait of Hormuz and increased crude shipments from other Gulf producers. Further movements will depend on whether tensions escalate or diplomatic efforts improve the outlook for regional oil supply.