Brent now implies the Strait of Hormuz is 15% open vs ~10% observed transit volume.
We now put the bad outcome over the next 90 days at 48%, up from 40%. Most of that is aligning this monitor with our Iran report; the news adds 2 points. A fourth tanker was hit and Iran declared the Strait closed, but none has sunk and about 14 mb/d still gets out.
- What is happening — Oil keeps leaving through the Strait at about 14 million barrels a day, in escorted batches on a US-run route. Iran attacks ships on that route but has not sunk a full tanker.
- What changed — Iran's armed-forces chief said the Strait is 'completely closed' to ships that do not follow Iran's rules (26 Oct). A fourth tanker hit in four days was confirmed. Egypt's parliament approved military support for Saudi Arabia against the Houthis.
- What could calm it — Saudi, Pakistani and Turkish envoys held talks in Tehran on 26 Oct and agreed to keep talking. Nothing is signed, and the US has not answered.
Our odds for the next 90 days
| Outcome |
Odds |
Change |
What it looks like |
| Base |
37% |
down 8 |
Iran report SIEGE. No strike and no deal in 90 days. Oil keeps moving at 11-14 mb/d under fire. Brent $100-115 after the December contract expires on 30 Oct. |
| Bad |
48% |
up 8 |
Iran report STRIKE 31 + SALVO 9 + PROXY 8. A US or Israeli strike and Iran's answer, an Iranian missile salvo, or the Houthis stop the Saudi bypass at Yanbu. The Strait shuts again. |
| Good |
15% |
same |
Iran report DEAL. A deal after the election, built on the regional compromise. The Strait reopens within about a week and ships switch their trackers back on. |
The call. Stage 2 of 5 (Fragile), getting worse. Our odds are now the same as our Iran report, grouped three ways. Iran's 'completely closed' is about who sets the rules, not about the oil: the US-run route keeps moving. The risk is in the next fortnight after the US vote on 3 November, when a strike can follow within 96 hours of an order. If a full tanker sinks or Yanbu stops, we move to stage 1.
What happened
- Tanker hits — UKMTO confirmed on 26 October that an outbound tanker was disabled by a projectile in the Strait on 23 October; crew safe. Four confirmed hits on 20-23 October, none sunk. A vessel was reported on fire off Iraq on 26 October; cause unknown.
- Iran's claim — Iran's armed-forces chief said the Strait is 'completely closed' and no ship breaking Iran's rules is safe. The US-backed route keeps moving: more than 30 crossings a day (INTERTANKO).
- Ships waiting — Ships holding position near the Strait: 170 on Monday evening, 102 on Tuesday morning (straits.live), after 144 on 23 October. No rush to leave.
- Strike talk — CNN: US forces could launch a major operation within 96 hours of an order; Trump has not decided, and an order is more likely after the 3 November election. Israel says it will not strike before its own vote today.
- Talks — Saudi Arabia's defence minister, Pakistan's army chief and Turkey's intelligence chief met Iran's leaders in Tehran on 26 October. They agreed to keep talking. Pakistan tabled a compromise with four possible guarantors (Reuters).
- The Saudi front — Egypt's parliament authorised military support for Saudi Arabia. A Houthi missile at Riyadh was intercepted; the Houthis claim hits on oil pumping stations. No damage at Yanbu is confirmed.
What would change our call
| If this happens |
We move to |
Where it stands now |
| A full tanker is sunk |
Stage 1 (shut) |
Four hits on 20-23 Oct, none sunk |
| Yanbu loadings stop |
Stage 1 |
Strikes claimed 24 and 26 Oct, no damage confirmed |
| US or Israeli strike on Iran's oil, answered on Gulf oil |
Stage 1 |
US ready within 96 hours of an order; likely after 3 Nov |
| Oil through the Strait below 8 mb/d for a week |
Stage 1 |
About 14 |
| Two editions with no sinking and no new hit |
Stage 2, direction 'weakening' |
Count restarted by the 23 Oct hit |
| Flow above 12 AND trackers-off below 45% AND regular Qatari gas cargoes |
Stage 3 (reopening) |
14 met; 57% not met; no gas cargo since early Oct |
What the price is paying for
- $115.81 — Brent December settled here on 26 October, down $0.91 from Friday. It expires on 30 October; from then, quote January, which trades about $5 lower. That drop will not be a fall in oil.
- $27.65 over next year — Oil for now costs $27.65 more than oil for delivery in a year. That gap is the market paying for a near-term stop.
- About $34 of Strait risk — On our numbers, about $34 of the price is the Strait. That is what the market would pay if the Strait were only about 15% open. In fact about 70% of the oil is getting through.
- Gas higher again — European gas (TTF) settled at EUR 96.68 per MWh on 26 October, a new high since late 2022. No loaded Qatari gas tanker has crossed since 3-4 October.