Persian Gulf Oil Flows Near Prewar Levels, but Shipping Risks Keep Crude Prices Elevated

Crude exports from the Persian Gulf have recovered to within 10% of prewar levels, yet oil prices remain elevated as attacks on vessels and energy infrastructure keep shipping costs high, according to TankerTrackers.com data. Iran's exports, which ran about 1.5 million barrels a day before the war, have fallen to zero since the U.S. reimposed its blockade in mid-July. Saudi Arabia, the world's largest exporter, has lifted shipments 10% above its prewar average. Brent for December settled nearly flat at $108.82 a barrel on Wednesday after hitting its highest level since May last week; WTI's December contract fell 0.7% to $97.15, per FactSet. Both were up more than 2% Thursday morning and have gained nearly 10% in October. Analysts cite barrel flows rerouted through pipelines, shuttle tankers and so-called dark-fleet vessels, plus continued attacks in the Strait of Hormuz and on Saudi Arabia's East-West pipeline. U.S. commercial crude inventories fell 3.1 million barrels in the week ending Oct. 16 to about 412.5 million, a third straight decline, the EIA said. Deutsche Bank's Michael Hsueh sees Brent at $74 in 2027 under a negotiated ceasefire, or toward $130 if war extends through 2027.