Brent Crude Continues to Trade Above $100/Barrel – As of press time, industry data shows Brent Crude trading at $102.83 a barrel, while West Texas Intermediate trades at $90.33 per barrel.
Prices continue to reflect the ongoing Middle East conflict.
Oil fields. Image Credit: Creative Commons.
Oil Tanker. Image Credit: Creative Commons.
While exports from the region have risen and sometimes exceeded pre-war levels, exporters must contend with higher logistics costs to bypass Iran’s blockade in the strait, and security and hazard pay for captains and crew who must pass through the waterway. Ship-to-ship transfers, a method used by other oil-exporting countries like the United Arab Emirates, cost more, while increased attacks on ships in the Gulf have caused a surge in seafarer pay.
Captains’ monthly income has risen to an average of roughly $100,000, including hazard pay, plus another $50,000 payout for each successful crossing.
Attacks on Vessels Are Becoming More Frequent
Maritime analytics firm Kpler reported that only seven commodity ships passed through the Strait of Hormuz last October 6, the lowest number recorded since July.
Fewer ship-to-ship transfers in the Gulf of Oman drove much of the decline; however, exports from the same area and the Red Sea rose to 6.7 million barrels per day, offsetting the loss of supply from Hormuz.
Lower traffic was attributed largely to the increased incidents of attacks in the strait, with a reported 12 attacks on oil tankers passing through the waterway in the week of September 28 to October 5.
Iran’s Revolutionary Guard employs different methods to harass and attack vessels it deems defiant to its blockade in the Strait of Hormuz.
These methods include surveillance and hailing through VHF radio, and all manner of drone operations.
Americans Continue to Grapple with High Pump Prices
As a result, Americans still pay a premium at the pump. Reports indicate gas prices have jumped up to 40% since the war in Iran began, with the national average at more than $4 per gallon.
Consumers in states with a higher cost of living, like California and Hawaii, pay significantly more.
The highest price was $7.28 per gallon in Mono County, California, while Schley County, Georgia, recorded the lowest average at $3.63 per gallon.
Republicans Scrambling for Solutions Ahead of Midterms
As gas prices remain a sore spot for many voters ahead of the November 3 midterm elections, President Donald Trump said he is considering suspending the federal gas tax to lower pump prices.
However, such a move would be outside the president’s purview and would require congressional approval. If the plan passes, though, it would only reduce gasoline prices by 18.4¢ and diesel prices by 24.4¢.
Despite it all, the president remains publicly optimistic about his party’s midterm performance, saying he expects Republican candidates to “do very well” in the polls and promising that gas prices would “drop like a rock” once the war in Iran ends.
US Touts Success of “Operation Economic Outcast”
Washington is touting the success of “Operation Economic Outcast,” saying that it is now targeting the remaining stragglers that are a part of Iran’s “shadow fleet,” a group of vessels holding millions of barrels of oil supply that the Muslim country managed to squirrel away before the US imposed its blockade on Iran’s oil exports.
“Treasury is starving the tyrannical regime in Tehran,” US Treasury Secretary Scott Bessent said in a statement, adding that the clock is ticking on Iran’s flailing economy, which relies heavily on its oil exports.
Iran Maintains that it has “Full Control” of Hormuz, Threatens Repercussions.
For its part, Iran is trying to dispute the narrative that oil exports from the region are closer to pre-war levels than ever, saying that it would be closing several “illegal” routes through the Strait of Hormuz.
Mohammadreza Naqdi, who leads Iran’s Revolutionary Guard, said small vessels were using these “illegal” passageways to smuggle crude past Iran’s blockade.
He also stressed that the Islamic state had “full control” over the strait.
About the Author: Tim Ramos
Tim Ramos has written for various publications, corporations, and organizations – covering everything from finance, politics, travel, entertainment, and sports – in Asia and the U.S. for more than 10 years.
