Brent crude hits $106 as Strait of Hormuz fears rattle oil markets

Brent crude prices surged to $106.60 a barrel on Friday, 25 September, gaining $3.52 as renewed geopolitical tensions in the Strait of Hormuz triggered a sharp increase in the global risk premium. Murban crude, the Abu Dhabi benchmark, rose 4% to reach $117.60, while U.S.-based West Texas Intermediate (WTI) remained steady at $94.51. Strait of Hormuz tensions drive divergence The price spike follows warnings from Iran that the Strait of Hormuz will not fully reopen unless the U.S. meets specific demands regarding its naval blockade. Data from OilPrice.com indicates Brent is now trading at a $12.09 premium over WTI, signaling that international markets are pricing in significant disruption risks for Middle Eastern seaborne supplies that do not apply to U.S. domestic crude. While tanker traffic continues, volumes remain significantly below normal levels as shipping firms adopt cautious routes and insurers hike premiums for the region. Saudi export recovery faces hurdles The market reaction on Friday, 25 September, comes despite efforts by Saudi Aramco to bypass the troubled waterway. Saudi Arabia has partially restarted its East-West pipeline, aiming to restore throughput to 4 million barrels per day to reach Red Sea terminals. MarineTraffic data showed approximately 12 million barrels were loaded at Ras Tanura and Juaymah on 21 September, yet these volumes have not been enough to calm fears of a sustained supply shock given the ongoing vulnerability of Red Sea routes to…