October West Texas Intermediate (WTI) crude oil futures traded at $86.31 late Thursday, up $4.82, or 5.91%, for the week. The contract opened at $81.62, traded as low as $80.80, and reached $87.69 during the session. Friday's session is still ahead, so the weekly result is not final — but the market has already made its decision about the week. WTI rallied because the agreement traders were waiting for never appeared.

The broader picture is equally clear. The Strait of Hormuz — the narrow chokepoint between Iran and Oman that links the Persian Gulf to the Gulf of Oman — is still operating far below normal. The ceasefire is finished. No talks are scheduled. Washington and Tehran are moving farther apart, not closer together.

Hormuz Traffic Is Still the Problem

The strait remains the whole trade. Before the war, about one-fifth of global oil and liquefied natural gas consumption moved through the waterway — roughly 20 million barrels a day of crude, condensate and refined products, according to the U.S. Energy Information Administration, plus about a fifth of globally traded LNG, much of it Qatari cargoes bound for Asia. Gulf producers — Saudi Arabia, Iraq, Kuwait, the UAE, Iran and Qatar — send the bulk of their crude and LNG through it, and the largest buyers are refiners in China, India, Japan and South Korea. This week, shipping traffic remained in the single digits. Kpler data showed five commodity vessels passed through the strait on Saturday, and none were registered on Sunday. By Tuesday, traffic had fallen to six vessels, down from nine the prior day. Wednesday's shipping report showed no improvement.

That is not a reopening. It is a restricted supply system that has not regained momentum. Refineries need cargoes they can schedule, insure, and receive on time — a diplomatic headline does not solve that problem.

Partial workarounds have emerged. Saudi Aramco, Saudi Arabia's state-controlled oil company, resumed some loadings from inside the strait and offered cargoes through transfers off Fujairah, the UAE port on the Gulf of Oman that lies outside the chokepoint. Chinese companies also began collecting crude outside the Gulf. Those moves helped prevent a complete supply breakdown, but the system remains restricted and has yet to regain momentum.

Fujairah's usefulness is structural: the port sits at the end of a UAE pipeline that carries about 1.5 million barrels a day from Abu Dhabi's onshore fields around the strait, and Saudi Arabia's East-West line to the Red Sea adds roughly 5 million barrels a day of bypass capacity. Even combined, those routes fall far short of the strait's normal throughput. With no negotiations on the calendar, the daily transit counts from trackers like Kpler, loading schedules inside and outside the chokepoint, and the cost of insuring Gulf voyages are the signposts left to watch.

Source: OilPrice.com