Isaias and Hormuz: Oil’s Two-Front Squeeze
A hurricane shut more than 70% of US Gulf output on Friday. Brent settled at $104.72.
United States. Oil traders spent the week pricing two supply shocks at once. In the Gulf of America, Hurricane Isaias forced producers to shut in 1,458,814 barrels a day on Friday, 71.51% of current output, according to figures reported by OilPrice.com, up from 62.89% on Thursday. Crews had left 129 of 371 manned platforms, and natural gas shut-ins reached 1.26 billion cubic feet a day. The storm reached Category 3 ahead of a forecast landfall near the Alabama-Florida line, TheStreet reported.
Brent settled at $104.72 on 9 October and WTI at $91.85, both up on the week, per Reuters. Brent had jumped 4.1% on Thursday.
## The bigger lever is offshore
The hurricane is the near-term story. The structural one is the Strait of Hormuz, which carried about 20% of global oil and fuel shipments before the Middle East war. Iran’s foreign minister, Abbas Araqchi, said Tehran was reviewing Washington’s response to a proposal to reopen the strait within seven days, and President Trump described “productive discussions” and ruled out an attack before the 3 November midterms. Tamas Varga of PVM Oil Associates said those remarks, together with China’s planned resumption of fuel exports, pushed prices lower early in Friday’s session.
## What is being watched
- Damage: undamaged platforms can restart quickly after inspection, OilPrice.com notes; harm to subsea equipment or pipelines would extend outages.
- Refining: the Gulf Coast is home to a large share of the US refining fleet, the EIA notes, and diesel supply is already strained by the Iran and Ukraine wars.
- Policy: Trump has said he is considering suspending the federal gasoline tax.
The risk to the bull case is diplomatic. A reopened Hormuz would remove more premium, faster, than any storm adds.
Sources: OilPrice.com, Nation Thailand (Reuters), TheStreet, US Energy Information Administration. This is information, not investment advice.
