Energy

At least nine tankers and cargo ships have come under attack near the Strait of Hormuz since October 11, and U.S. Central Command said Iran sank the Singapore-registered container ship GFS Pride. Crude shipments through the strait fell to about 9.4 million barrels a day, roughly 70% of the pre-war average. Brent touched $110 for the first time since May and settled up 3.7% at $109.86 on Friday, while WTI rose 3.5% to $101.41 and gained more than 10% on the week. A Houthi missile heading toward Saudi Arabia's Yanbu export terminal was intercepted.

Why it matters here: Curtailed Gulf exports add a supply risk premium directly to the Brent and WTI benchmarks the class tracks, and upstream producers' revenue rises with realised crude above $100; integrated majors rose about 2.5% on Friday. With no U.S.-Iran deal in sight and strike plans against Iranian energy infrastructure reported, the premium has a reason to persist for weeks.

Counterpoint: The premium is political and can vanish quickly: President Trump said he would not use nuclear weapons or send ground troops, front-month crude is already stretched far above its moving averages, and a credible de-escalation or faster emergency stock releases would remove much of the gain.

President Zelenskyy told the Financial Times that Ukraine would resume attacks on Russian energy targets after a three-day pause requested by Washington, citing a large Russian assault on Ukrainian energy infrastructure that included about 40 ballistic missiles. The energy ceasefire announced on October 11 had been meant to lower oil and diesel prices before the U.S. midterm elections; U.S. diesel averaged $6.33 a gallon on Friday.

Why it matters here: Lost Russian refining capacity tightens middle-distillate markets first, widening product margins for U.S. refiners and integrated majors and supporting Brent as the benchmark for the European product markets most exposed to the outages.

Counterpoint: No new strike was verified inside the window, Washington has already brokered one pause and could broker another, and refinery outages can free more Russian crude for export, which would weigh on crude even while diesel stays tight.

The EIA reported that U.S. commercial crude inventories excluding the Strategic Petroleum Reserve fell by 8.557 million barrels to 415.6 million in the week ended October 9, with Gulf Coast stocks down 9.239 million barrels. The decline was attributed to production shut-ins from Hurricane Isaias.

Why it matters here: Tighter domestic inventories feed directly into WTI, which is priced off U.S. balances, adding a local squeeze on top of the global supply premium.

Counterpoint: Hurricane shut-ins typically reverse within weeks; as Gulf output restarts, stocks should rebuild and the draw should unwind.

The EIA said working gas in underground storage rose by 67 Bcf to 3,567 Bcf in the week ended October 9, 45 Bcf above the five-year average of 3,522 Bcf and 143 Bcf below a year earlier.

Why it matters here: Comfortable storage heading into winter caps the front-month natural gas contract, which fell about 3.7% on Friday, and separates the gas leg of the class from the oil rally.

Counterpoint: Stocks are still 143 Bcf below last year, so a cold early winter or stronger LNG exports could tighten the market quickly.