Oil prices climbed sharply this week as two supply shocks hit at once: attacks on tankers near the world’s most important oil chokepoint, and a hurricane shutting down most of America’s offshore production.
Brent crude settled about 4 percent higher at $104.28 a barrel, while West Texas Intermediate rose 3.6 percent to $91.49. Traders pointed to reports of nine tankers attacked in and around the Strait of Hormuz over the past week, alongside the US blockade that has largely halted Iranian crude loadings. Treasury officials say Iran has only about 20 million barrels left on vessels outside the blockade — barely a fifth of one day’s global consumption.
Then came the weather. Hurricane Isaias forced the evacuation of 121 Gulf of Mexico production platforms and five drilling rigs, shutting in about 1.28 million barrels a day — nearly 63 percent of offshore output — as of Thursday morning, up from roughly half a million barrels a day on Wednesday. BP, Shell and Chevron were among the operators pulling crews and curbing production.
The combination lands directly on household budgets. Fuel costs are already the most visible channel through which the Iran war reaches American wallets, and analysts have warned that sustained triple-digit crude feeds quickly into gasoline, heating and transport prices.
Oil eased slightly Friday after the president ruled out new strikes on Iran before the midterms. But with a hurricane making landfall and a blockade holding, traders say the relief rally has shallow roots.
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