Oil Mixed Amid Hormuz Tensions as Brent Nears $110 a Barrel

Oil was mixed as the market weighed the possibility of tighter Iranian control over the Strait of Hormuz against a rebound in crude exports from the Persian Gulf.

According to Bloomberg on Oct. 19, front-month West Texas Intermediate traded around $98 a barrel. The contract struggled to find a clear direction after swinging within a roughly $3 range in the previous session. Brent settled at $109.55 a barrel, near its highest level in about five months.

The prospect of tighter Iranian control over the Strait of Hormuz is adding upward pressure to prices. Iran's First Vice President Mohammad Reza Aref said through the state-run IRNA news agency that the country had no choice but to exercise control over the strait to protect national security.

Even so, crude exports from the Persian Gulf are recovering quickly despite military clashes in the Middle East. U.S. Energy Secretary Chris Wright told Fox News that crude shipments had recovered to about 80% of prewar levels. Refined-product exports remain constrained.

Oil prices have risen sharply this year on concerns about supply disruptions tied to the expanding Middle East conflict and the Russia-Ukraine war. Brent has surged about 80% since the start of the year, while refined-fuel prices, including European diesel futures, have climbed even more. Supply uncertainty remains as attacks on tankers and energy facilities continue even as crude transport moves toward normalization.

The U.S. government is also pursuing steps to boost crude supply by allowing the sale of sanctioned tankers. Wright said those vessels are being allowed to enter crude transport after being sold, and he estimated the so-called dark fleet at about 1,600 ships worldwide.