Oil Extends Rally Despite Higher Hormuz Volume Reports
Crude oil prices continued rising after gains that began Monday, even as data suggested flows through the Strait of Hormuz have picked up since early September. Brent traded near $107.37 per barrel and West Texas Intermediate around $94.31, with the widening spread linked to reports of a possible U.S. diesel export ban.
Why It Matters
The market is balancing higher reported export volumes from the Gulf against costly and less efficient workarounds such as ship-to-ship transfers and longer rerouting around Africa, which keep supply-side costs elevated and support prices despite increased flows.
Key Facts
- Brent crude price: $107.37 per barrel
- West Texas Intermediate price: $94.31 per barrel
- Estimated daily flows out of the Strait of Hormuz: 12.8 million barrels (Kpler estimate)
- Reported workaround used by Saudi Arabia: Ship-to-ship transfers after Houthi strikes
- Damage cited: Houthi strikes on East-West pipeline and Yanbu port on the Red Sea (reported)
Crude benchmarks extended gains that began earlier in the week even as some analytics firms reported a sizable increase in daily oil volumes moving out of the Strait of Hormuz. At the time of reporting, Brent was quoted at about $107.37 a barrel and WTI at $94.31, with the gap between the two blamed in part on reports of a possible U.S. ban on diesel exports. Kpler estimated on Monday that roughly 12.8 million barrels per day were flowing out of Hormuz, a figure higher than many observers had expected. That estimate contrasts with tanker tracking datasets showing crippled visible traffic, a discrepancy Kpler and others attribute to vessels operating in “dark mode” and to ship-to-ship transfers that avoid conventional tracking metrics. Saudi producers have increasingly resorted to ship-to-ship transfers after Houthi attacks damaged regional energy infrastructure, including the East-West pipeline and sections of the Yanbu port. Traders and analysts say these improvised methods raise the cost and complexity of getting crude out of the Gulf, supporting higher prices despite the uptick in measured exports. Tanker charter rates are at record levels, amplifying the expense of exports and tightening vessel availability, since ship-to-ship operations require additional shipping resources. Meanwhile, some maritime traffic is being rerouted from the Red Sea around the Cape of Good Hope, lengthening journeys and adding further logistical strains on supply chains and costs.