Oil wavers near five-month high as Iran threats vie with flows

Brent oil hovered near a five-month high as traders balanced the risk of additional Iranian attacks on the Strait of Hormuz with strong crude shipments from the Persian Gulf. The benchmark was just under $110 a barrel, near its May peak, while the most-traded West Texas Intermediate contract was close to $99. Iran's First Vice-President Mohammad Reza Aref stated that Iran had "no choice" but to maintain control over Hormuz to protect the nation's security, according to the state-run news agency IRNA.

Despite recent tensions around the waterway, crude exports from the Gulf have remained brisk. US Energy Secretary Chris Wright informed Fox News that flows had rebounded to about 80% of their pre-war pace, although refined-product shipments were still limited. Brent oil prices had jumped about 80% since early 2026 as escalating conflicts in the Middle East and between Russia and Ukraine threatened energy supplies.

Refined products had surged even more, with European diesel futures soaring. Geopolitical risks to oil prices remained high due to renewed threats against tankers and energy infrastructure. Hamad Hussain, a commodities economist at Capital Economics, noted that "the risks to oil prices clearly lie to the upside." Iran's Aref claimed the Islamic Republic could guarantee safe passage for friendly nations through Hormuz, but warned that the US was responsible for the current situation and would have to bear the consequences.

The remarks were made during a meeting in Tajikistan with Russian Prime Minister Mikhail Mishustin. Iraq was among the Persian Gulf producers boosting crude shipments, with the country's oil minister stating exports had surpassed 3.4 million barrels per day in October. This was close to pre-war levels after Iraq offered substantial discounts to regional benchmarks.

The US administration authorized the sale of sanctioned oil tankers to legally transport crude, aiming to increase capacity as the US-Iran war strained supplies and raised freight costs. Wright estimated there were around 1,600 vessels in the global "dark fleet."