Oil prices spiked sharply on Thursday after diplomatic efforts between Iran and the United States at the United Nations General Assembly failed to yield any visible progress toward ending their seven-month conflict, according to Ship & Bunker.
By mid-session, Brent crude had climbed more than 4.5 percent to $107 per barrel, while West Texas Intermediate rose over 3.5 percent to nearly $96 per barrel, Ship & Bunker reported. The rally briefly eased after Reuters reported that both Iran and the U.S. were exploring a phased path out of the war, but renewed rhetoric from both sides quickly dampened hopes of de-escalation.
Iran Signals Broader Conflict Zone
Adding to a string of recent threats, Yahya Safavi, a former commander of Iran’s Islamic Revolutionary Guard Corps and current advisor to Iran’s supreme leader, said the country could extend the conflict into the Indian Ocean “or elsewhere” should the U.S. or Israel launch further strikes, according to Ship & Bunker.
Separately, Saudi officials reported intercepting six ballistic missiles fired by Iran-backed Houthi forces in Yemen, preventing damage to the southern province of Taif and the Red Sea port city of Yanbu, Ship & Bunker reported.
Saudi Arabia Adapts Around Hormuz Pressure
Despite the regional tensions, Ship & Bunker reported that Saudi Arabia has continued expanding crude flows through its East-West Pipeline to the Yanbu export hub, though tanker loadings from that route have not yet resumed. The pipeline’s swift repair after a Houthi attack has defied earlier Goldman Sachs projections that recovery could take several months, according to the report.
Trade sources cited by Bloomberg, and referenced in Ship & Bunker’s report, indicated that Saudi Arabia has transited roughly 100 million barrels of crude — approximately one day of global oil demand — through the Strait of Hormuz since the middle of last week, delivering cargoes to Asian buyers for October and November arrival, despite Iran’s repeated claims of having closed the strait.
Separately, the Brent-WTI premium widened to its highest level since May for a second consecutive session, a signal that exporting crude from the U.S. has become more economically attractive. However, Ship & Bunker noted that analysts pointed to sharply higher tanker charter costs as a factor behind reduced U.S. export volumes compared with earlier highs this year.
Does This Matter to You?
Continued volatility in the Strait of Hormuz and the potential for conflict to spread into the Indian Ocean carries direct implications for vessel routing, insurance costs, and bunker fuel availability in the region. Rising crude benchmarks and widening freight-related price spreads, as reported by Ship & Bunker, may also influence bunker procurement costs and charter rates in the near term.
The report indicates Saudi Arabia has so far managed to keep crude flowing through Hormuz despite Iranian threats, suggesting the waterway remains functionally open for now. Still, the situation remains fluid, and any escalation — particularly threats to extend operations into the Indian Ocean — could affect transit planning and risk assessments for vessels operating in or near the region.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker (via Reuters, Bloomberg)
