Oil prices stayed rangebound this week, with ICE Brent around $105 per barrel. Hurricane-related shut-ins no longer support prices, so attention has returned to conflicts involving Iran, Russia and Ukraine, and the Houthis and Saudi Arabia.
Oil prices were relatively rangebound this week as frequent Hormuz transits and frequent Iranian drone attacks found an equilibrium point around $105 per barrel for ICE Brent.
Production shut-ins triggered by Hurricane Isaias no longer provide bullish support. Total offline capacity in the US Gulf of Mexico dipped to 200,000 b/d by Friday, and offshore production returning to its pre-Isaias state at some point next week. Oil markets are therefore back to watching wars: US vs Iran, Russia vs Ukraine and Saudi Arabia vs Yemen's Houthis.
Houthi strikes hit Saudi Aramco as Iran ships fuel despite blockade
Houthi drone strikes caused extensive damage to Saudi Aramco's Dhahran headquarters. The Yemeni militia vowed further attacks on airports and oil facilities.
Meanwhile, shipping and intelligence data suggest Iran has exported some LPG and jet fuel cargoes since the US Navy reinstated its maritime blockade of the Gulf of Oman. At least 8 LPG carriers delivered an estimated 4.1 million barrels.
Ukraine resumes refinery strikes as Washington weighs sanctions relief
Ukraine resumed attacks on Russian refineries after an awkward 4-day energy truce allegedly negotiated by US President Trump. It struck Rosneft's 340,000 b/d Ryazan plant.
Separately, the Trump administration is considering removing sanctions from selected vessels, believed to be part of Russia's so-called shadow fleet or previously linked to Venezuelan deliveries. The aim is to let them carry oil, particularly from Gulf countries.
Diesel tightness stretches into 2027
The International Energy Agency warned that global diesel tightness would extend into 2027. Persistent supply shortages make it unlikely that stocks will be rebuilt before Q3 2027, as diesel production fell 1.7 million b/d year-on-year to 27.2 million b/d.
Chinese exports of refined products surged to a 4-year high of 1.88 million b/d in September, up 39% year-on-year. October exports halved to 933,000 b/d so far.
Source: Oilprice.com
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