Why is Brent crude surging and what does seasonality say?
Hormuz incidents, a fragile Russia-Ukraine ceasefire and tight diesel supply keep oil bid.
Brent crude reached $107.25 on Monday, its highest since Sept. 16, after Iran reported that an oil tanker had been hit in the Strait of Hormuz. A fragile Russia-Ukraine energy ceasefire and tight diesel markets add to the supply worries. Seasonality leans softer from here, but this year the supply shock matters more than the calendar.
Sources: Cointelegraph, Euronews, UPI, The National. Details
What happened to Brent crude this week?
Brent crude reached $107.25, its highest since Sept. 16, after Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz. WTI spiked past $94 per barrel on the same news.
The move came after a calmer start to the day. Oil prices fell early Monday after Donald Trump announced an "energy ceasefire" between Russia and Ukraine. That drop offset a fresh wave of Houthi attacks on Saudi Arabia. Later reports of doubts over the ceasefire and the tanker incident pushed prices back up.
By the last close in our data, Brent stood at 106.65 on October 12, 2026. That is +6.31% over one week and +3.01% so far in October.
Why does the Strait of Hormuz move oil prices so much?
The strait is a narrow passage for tankers leaving the Persian Gulf. Any attack, delay or rise in insurance cost there changes how much oil reaches buyers. Traders price that risk straight into crude, often within minutes.
Analysts disagree on how large the risk premium should be. One former Goldman Sachs strategist argued that markets had priced in too much of it, pointing to improving transit volumes. A fresh tanker incident challenges that view.
Gas markets show the same strain. Qatar extended force majeure on LNG deliveries, and LNG flows through the Strait of Hormuz remain 80% below February levels, according to Kpler. That keeps energy tight across Asia and Europe, which supports oil as well.
What is the IEA doing about diesel?
The International Energy Agency called on its members to accelerate previously agreed releases from strategic oil reserves, prioritising diesel. It also asked members to assess whether additional diesel releases are necessary.
Diesel matters because it moves freight, farms and heating in Europe. A tight diesel market raises costs across the economy and can keep inflation elevated, even when crude itself pauses.
Reserve releases can ease a squeeze for a time. They do not add new production, so the effect depends on how long the disruption lasts.
What does history show for Brent in October and November?
Since 2007, Brent has averaged -1.01% in October, with 53% of Octobers higher across 19 years. The median October was +0.43%, so the pattern is mixed.
November is the weakest month for Brent on average at -2.91%, with 47% of Novembers higher. The last ten years averaged -1.81% in November.
Past oil supply cuts give a different picture. Across 5 cases in our event data, Brent averaged +4.09% after five trading days and +4.52% after twenty. Supply shocks have tended to override the seasonal pattern in the short run. This is a historical tendency and it is not a forecast.
What could happen next, and what are the signposts?
Scenario one: the risk premium builds. More shipping incidents near Hormuz or a collapse of the Russia-Ukraine ceasefire keep crude bid. Signposts are further tanker attacks, renewed strikes on energy sites and faster stock draws in diesel.
Scenario two: the premium drains. Transit volumes improve, the ceasefire holds and reserve releases ease diesel tightness. Signposts are calmer Hormuz reports, falling insurance costs and a Brent-WTI gap that narrows.
Scenario three: demand worries take over. US CPI is due on Wednesday, with markets seeing it at 3.7% year-on-year after 3.4% in August. A hot reading could lift rate fears and weigh on growth expectations, which would cool oil even with supply still tight.
Seven core OPEC+ members kept November output unchanged at their October 4 meeting, and the next meeting is on November 1. That date is a catalyst to watch.
What to watch
- US CPI on Wednesday and PPI on Thursday
- Further tanker incidents in the Strait of Hormuz
- Reports on whether the Russia-Ukraine energy ceasefire holds
- The next OPEC+ meeting on November 1
- The Federal Open Market Committee meeting on Oct. 28
Questions
How high did Brent crude go this week?
Brent crude reached $107.25 on Monday, its highest since Sept. 16. WTI spiked past $94 per barrel at the same time.
Is November usually a weak month for oil?
Yes. November ranks as the weakest month for Brent on average at -2.91% since 2007. Only 47% of Novembers finished higher, and supply shocks can override the pattern.
Why does US inflation data matter for oil?
Fuel costs feed into consumer prices. US CPI is due on Wednesday, and markets see it at 3.7% year-on-year versus 3.4% in August. A surprise in either direction can shift rate expectations and risk appetite, which in turn affects oil.
What is the IEA asking its members to do?
The agency asked members to accelerate previously agreed releases from strategic oil reserves, prioritising diesel. It also asked them to assess whether additional diesel releases are necessary.
Sources and method (6)
- Brent crude reached $107.25, its highest since Sept. 16, after Iran reported that an oil tanker had been hit and was ablaze in the Strait of Hormuz, while WTI spiked past $94 per barrel. Cointelegraph, Oct 12
- Oil prices fell early Monday after Donald Trump announced an "energy ceasefire" between Russia and Ukraine, which offset a fresh wave of Houthi attacks on Saudi Arabia. Euronews, Oct 12
- The International Energy Agency called on its members to accelerate previously agreed releases from strategic oil reserves, prioritising diesel, and to assess whether additional diesel releases are necessary. Euronews, Oct 12
- US CPI is due on Wednesday and PPI on Thursday, with markets seeing CPI at 3.7% year-on-year after 3.4% in August, ahead of the Federal Open Market Committee's Oct. 28 meeting. Cointelegraph, Oct 14
- Seven core OPEC+ members kept November output unchanged at their October 4 meeting. The next meeting is on November 1. UPI, Oct 4
- Qatar extended force majeure on LNG deliveries to November for Asia and to December for Europe. LNG flows through the Strait of Hormuz remain 80% below February levels, according to Kpler. The EU ban on Russian LNG starts in January. The National, Oct 2