Crude oil
Updated
Summary
Crude oil is unrefined petroleum, the feedstock refineries turn into gasoline, diesel, jet fuel and other products. It is priced mainly off two benchmarks: Brent for seaborne oil and WTI for the US. The United States is the largest producer, at 13.6 million barrels a day in 2025, and China is the largest importer. About a quarter of the world's seaborne oil trade passed through the Strait of Hormuz in 2025. Since the Iran war began on 2026-02-28, that strait has driven oil supply, prices and stock policy.
Key numbers
Spot price, Brent / WTI: $126.55 / $101.91 per barrel (as of 2026-10-14). Source: eia.gov
Brent monthly average, September 2026 (EIA): $114/b, up $23 from August (as of 2026-10-06). Source: eia.gov
EIA Brent forecast: 4Q26 / 2026 / 2027: $105 / $96 / $84 per barrel (as of 2026-10-06). Source: eia.gov
Dated Brent vs Brent futures (IEA, mid-October): ~$134/b vs ~$107/b (as of 2026-10-14). Source: iea.org
Global observed oil stocks vs end-February 2026: -509 million barrels (-2.4 million b/d) (as of 2026-09-30). Source: iea.org
World oil demand change: 2026 / 2027 vs 2025 (IEA): -2.6 million b/d / 620 kb/d below 2025 (as of 2026-10-14). Source: iea.org
Gulf crude exports / Hormuz oil flows, September 2026: 13.9 / 10.9 million b/d (as of 2026-09-30). Source: iea.org
Hormuz oil flows: 4Q25 / 2Q26 (EIA): 21.6 / 4.9 million b/d (as of 2026-08-12). Source: eia.gov
Gulf crude shut-ins: September / May peak (EIA): 4.8 / 10.9 million b/d (as of 2026-10-06). Source: eia.gov
IEA collective action: released / remaining: ~330 million / ~100 million barrels; total to exceed 400 million (as of 2026-10-15). Source: iea.org
US SPR / US commercial crude stocks: 283.0 / 415.6 million barrels (as of 2026-10-09). Source: eia.gov
US crude production, 2025 (world's largest): 13.6 million b/d (as of 2026-07-09). Source: eia.gov
Timeline
2026-10-15 — IEA Governing Board agrees to complete the last ~100 million barrels of the March release, over 20 million of it diesel, as soon as possible; ~330 million already released. (Source: iea.org)
2026-10-15 — EIA: US commercial crude stocks fall 8.5 million barrels to 415.6 million; SPR flat at 283.0 million. (Source: eia.gov)
2026-10-14 — IEA Oil Market Report: stocks 509 million barrels below end-February, 2026 demand down 2.6 million b/d, Dated Brent near $134. (Source: iea.org)
2026-10-11 — IEA chief asks members behind on pledges to speed up releases, diesel first. (Source: iea.org)
2026-10-07 — IEA says about 325 million barrels released and members hold about 1.1 billion barrels of public stocks. (Source: iea.org)
2026-10-06 — EIA October STEO: Brent averaged $114 in September; forecast $105 for 4Q26 and $84 for 2027. (Source: eia.gov)
2026-10-04 — Seven OPEC+ countries keep September production levels for November; next meeting 2026-11-01. (Source: opec.org)
2026-10-02 — G7 leaders commit to a 100 million barrel IEA release over four months, diesel in the first 20 days. (Source: pm.gc.ca)
2026-09-29 — DOE offers up to 40 million barrels of SPR crude as an exchange, returned with premium barrels. (Source: energy.gov)
2026-06-26 — Brent falls to $72, its second-quarter low, after the 2026-06-17 US-Iran memorandum. (Source: eia.gov)
2026-04-28 — The UAE announces it will leave OPEC from 2026-05-01, cutting OPEC+'s share of world crude output. (Source: eia.gov)
2026-04-02 — Brent reaches almost $128 as EIA estimates March Gulf shut-ins at 7.5 million b/d. (Source: eia.gov)
2026-03-11 — IEA members agree a record 400 million barrel emergency release; the US pledges 172 million barrels from the SPR. (Source: iea.org)
2026-03-01 — Eight OPEC+ countries resume unwinding 1.65 million b/d of voluntary cuts, +206,000 b/d from April. (Source: opec.org)
2026-02-28 — The Iran war begins and the Strait of Hormuz is effectively closed. (Source: eia.gov)
Key actors and links
Strait of Hormuz (place:strait-of-hormuz): The main chokepoint: flows fell from 21.6 million b/d in 4Q25 to 4.9 in 2Q26 and recovered to 10.9 in September 2026.
2026 Iran war (event:2026-iran-war): Inference (AA): the war that began on 2026-02-28 drove the shut-ins, the stock draw and the price spike.
Refined products (commodity:diesel): The tightest part of the chain: refined-product exports lag crude, so the IEA put diesel first in its final release.
Oil inventories (indicator:oil-inventories): Global observed stocks are 509 million barrels below end-February; the IEA sees no gasoil-stock rebuild before 2H27, per the October OMR.
Brent price (indicator:brent-price): The global benchmark: $126.55 spot on 2026-10-14 against a $114 September average.
Saudi Arabia (country:saudi-arabia): Led the September recovery in Gulf exports and runs the East-West bypass; still in the OPEC+ group of seven.
Saudi Aramco (actor:saudi-aramco): Operates the East-West bypass line to Yanbu and the Gulf export system, both under Houthi threat in October 2026.
United Arab Emirates (country:united-arab-emirates): Left OPEC from 2026-05-01; owns the other bypass pipeline, to Fujairah.
United States (country:united-states): Largest producer (13.6 million b/d in 2025) and largest SPR contributor, 172 million barrels pledged.
China (country:china): Largest importer; cut imports 32% in 2Q26, which EIA says softened the price spike.
Houthis (actor:houthis): Threaten Saudi oil sites and Red Sea shipping, a risk to the bypass route.
Energy-driven inflation pressure (theme:energy-driven-inflation): Inference (AA): oil and diesel prices pass into headline inflation and keep central banks cautious.
Why it matters now
The war turned a chokepoint into a stock crisis. Hormuz oil flows fell from 21.6 million barrels a day in late 2025 to 4.9 million in the second quarter of 2026, and EIA put Gulf shut-ins at a 10.9 million b/d peak in May. The world filled the gap from inventories. IEA members agreed a record 400 million barrel release on 2026-03-11. Even so, global observed stocks ended September 509 million barrels below end-February, and the US SPR is at 283.0 million barrels, against 407.0 million a year earlier.
Supply is now recovering, but the shortage has moved downstream. Gulf crude exports reached 13.9 million b/d in September, yet refined-product exports lag, and diesel is the tightest market. That is why the IEA Board agreed on 2026-10-15 to complete the last ~100 million barrels of its March release, diesel first. Prices show the squeeze: Brent averaged $114 in September, spot Brent was $126.55 on 2026-10-14, and Dated Brent traded near $134, well above futures near $107. EIA and the IEA both expect inventories to rebuild in 2027. Inference (AA): refilling emergency stocks will add demand then.
Risks and open questions
Bull case: The supply side is mending. Gulf crude exports reached 13.9 million b/d in September, over 75% of pre-war levels, and Hormuz flows rose to 10.9 million b/d. Demand is falling: the IEA expects a 2.6 million b/d drop in 2026. Governments still hold about 1.1 billion barrels of public stocks, and the last ~100 million barrels of the March release, diesel first, are being sped up. EIA expects most Gulf output back by mid-2027 and Brent at $84 for 2027, and both agencies see inventories building in 2027.
Bear case: Physical oil is tighter than the forecasts imply. Spot Brent was $126.55 on 2026-10-14, already above EIA's $105 4Q26 forecast made with data to 2026-10-01, and Dated Brent traded near $134. Global stocks are 509 million barrels below end-February, and US commercial crude fell 8.5 million barrels in one week. The recovery depends on bypass routes that were attacked in September and October. SPR barrels lent out must be returned, adding demand in 2027.
Falsifiers: - Bull weakens if Gulf crude exports fall back below 10 million b/d in the IEA's November report. - Bull weakens if global observed stocks keep falling in October and November despite the IEA release. - Bull weakens if Brent stays above $120 into the November STEO, well above EIA's $105 4Q26 path. - Bear weakens if the Dated Brent premium over futures closes and US commercial crude stocks rebuild for several weeks. - Bear weakens if OPEC+ raises required production at its 2026-11-01 meeting and Gulf output keeps recovering.
What to watch
IEA report to G7 leaders, including on stock replenishment (due within 20 days of 2026-10-02). (by about 2026-10-22); Source: pm.gc.ca
EIA weekly SPR, crude and distillate stocks. (2026-10-21, then weekly); Source: eia.gov
OPEC+ group of seven monthly meeting (agenda not stated in the 2026-10-04 announcement). (2026-11-01); Source: opec.org
EIA November STEO, the first to include the October G7 and IEA actions. (2026-11-10); Source: eia.gov
OPEC+ Joint Ministerial Monitoring Committee, 69th meeting. (2026-11-29); Source: opec.org
SPR exchange deliveries and the 40 million barrel award. (November-December 2026); Source: energy.gov
IEA diesel assessment and any further diesel-only release. (no scheduled date); Source: iea.org
AA expects SPR and other refill schedules to become a 2027 demand factor once governments set them. (2027; no schedule published); speculative, no scheduled source
AA expects further Houthi or Iranian strikes on Gulf export infrastructure to be the main risk to the supply recovery. (no scheduled date); speculative, no scheduled source
AA inference
Inference (AA): Crude oil is the graph's main channel from the Iran war and Hormuz to inflation, central-bank policy and fiscal stress. The causal chain is: chokepoint closure, shut-ins, stock draws, a wide gap between physical and futures prices, then diesel and headline inflation. The October 2026 data say the crude shortage is easing while the product shortage is not, so diesel now carries more of the transmission than crude. Emergency stocks bought time, but they also create a refill bill for 2027. The view weakens if Dated Brent converges with futures and stocks rebuild before year-end.
Sources
The United States remained the world's largest crude oil producer in 2025, at a record 13.6 million b/d including lease condensate, about 40% more than Russia (about 9.9 million b/d) or Saudi Arabia (9.6 million b/d) (EIA, 2026-07-09). (Source: eia.gov, accessed 2026-10-16)
China is the world's largest crude oil importer; it set an annual import record of 11.6 million b/d in 2025, then imported 8.1 million b/d in 2Q26, 32% less than in 1Q26, as Hormuz disruption raised prices; EIA says lower Chinese buying softened upward price pressure (EIA, 2026-07-31). (Source: eia.gov, accessed 2026-10-16)
EIA estimates total oil flows through the Strait of Hormuz at 21.6 million b/d in 4Q25 (15.9 crude and condensate, 5.7 products), 14.9 million b/d in 1Q26 and 4.9 million b/d in 2Q26; EIA warns 2026 Hormuz volumes rely on unreliable AIS data and are revised often. (Source: eia.gov, accessed 2026-10-16)
IEA: around 25% of the world's seaborne oil trade transited the Strait of Hormuz in 2025; only Saudi Arabia and the UAE have operational crude bypass pipelines, with an estimated 3.5 to 5.5 million b/d of available bypass capacity. (Source: iea.org, accessed 2026-10-16)
The conflict involving Iran began on 2026-02-28 and led to the effective closure of the Strait of Hormuz; the UAE announced on 2026-04-28 that it was leaving OPEC, effective 2026-05-01. In 2025 the UAE produced 3.4 million b/d with about 4.2 million b/d of effective capacity; without it OPEC+'s share of world crude output would have been closer to 42% than 46% (EIA, 2026-06-23). (Source: eia.gov, accessed 2026-10-16)
On 2026-03-01 eight OPEC+ countries (Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, Oman) agreed to resume unwinding the 1.65 million b/d of April 2023 voluntary cuts, starting with a 206,000 b/d increase in April 2026. (Source: opec.org, accessed 2026-10-16)
On 2026-03-11 IEA members agreed to make 400 million barrels of emergency stocks available, the largest release the agency has coordinated and its sixth collective action since 1974; crude and product exports through Hormuz were then less than 10% of pre-conflict levels. Members held over 1.2 billion barrels of public emergency stocks plus 600 million barrels of obligated industry stocks. (Source: iea.org, accessed 2026-10-16)
On 2026-03-11 the US Department of Energy announced a 172 million barrel release from the Strategic Petroleum Reserve as part of the IEA action, with drawdown over about 120 days and about 200 million barrels to be returned within a year. (Source: energy.gov, accessed 2026-10-16)
EIA's April 2026 STEO estimated that Gulf producers shut in 7.5 million b/d of crude in March 2026, forecast 9.1 million b/d for April, and reported that Brent averaged $103/b in March and reached almost $128/b on 2026-04-02. (Source: eia.gov, accessed 2026-10-16)
EIA reported Brent fell to a low of $72/b on 2026-06-26 after the 2026-06-17 US-Iran memorandum, with daily swings averaging about $4/b in April-May 2026; EIA estimated 2Q26 global crude inventory draws of 5.1 million b/d. (Source: eia.gov, accessed 2026-10-16)
EIA's October 2026 STEO (released 2026-10-06, inputs finalised 2026-10-01): Brent averaged $114/b in September 2026, $23/b above August; EIA forecasts $105/b in 4Q26, $96/b for 2026 and $84/b for 2027, falling to $74/b by 4Q27; WTI is forecast at $88.21/b for 2026 and $79.74/b for 2027. (Source: eia.gov, accessed 2026-10-16)
EIA's October 2026 STEO puts Gulf crude shut-ins at 4.8 million b/d in September (5.8 in August, a 10.9 peak in May), forecasts 4.5 million b/d in 4Q26, and expects most regional output to return to pre-conflict levels by end-2Q27; global inventories fell 1.9 million b/d in 3Q26 and are forecast to fall 0.7 million b/d in 4Q26 and build 4.91 million b/d in 2027. The forecast includes the 40 million barrel SPR exchange but not the G7 action of 2026-10-02. (Source: eia.gov, accessed 2026-10-16)
EIA's October 2026 STEO forecasts US crude production of 13.9 million b/d in 2026 and 14.3 million b/d in 2027, and US retail diesel averaging $6.29/gal in September 2026. (Source: eia.gov, accessed 2026-10-16)
EIA's next Short-Term Energy Outlook is scheduled for 2026-11-10. (Source: eia.gov, accessed 2026-10-16)
IEA Oil Market Report (2026-10-14): world oil demand is forecast to fall 2.6 million b/d in 2026, and a 2 million b/d recovery leaves 2027 demand 620 kb/d below 2025; supply fell 5.8 million b/d to 100.7 million b/d in 2026 and is projected to rise 7.7 million b/d in 2027. (Source: iea.org, accessed 2026-10-16)
IEA Oil Market Report (2026-10-14): global supply rose 2.5 million b/d to 102.3 million b/d in September, with OPEC+ gains of 2.1 million b/d led by Saudi Arabia; Gulf crude exports rose 4.4 million b/d to 13.9 million b/d, over 75% of pre-war levels, and Hormuz flows rose 3.7 million b/d to 10.9 million b/d. (Source: iea.org, accessed 2026-10-16)
IEA Oil Market Report (2026-10-14): global observed stocks ended September 509 million barrels (-2.4 million b/d) below end-February; OECD stocks fell 37 million barrels in September; OECD gasoil stocks fell to 565 million barrels in July, the lowest since November 2023; the OMR said replenishing lost gasoil inventories is unlikely before 2H27. (Source: iea.org, accessed 2026-10-16)
IEA Oil Market Report (2026-10-14): Dated Brent rose $26.17/b to $116.89/b in September and traded around $134/b at the time of writing, while Brent futures were around $107/b; global diesel exports in September were 700 kb/d lower year on year, and the gasoil market returns to surplus in 1Q27. (Source: iea.org, accessed 2026-10-16)
EIA daily spot prices for 2026-10-14: Brent $126.55/b, WTI Cushing $101.91/b, New York Harbor ultra-low-sulfur diesel $5.066/gal. (Source: eia.gov, accessed 2026-10-16)
US SPR crude stocks were 282,983 thousand barrels in the weeks ending 2026-10-02 and 2026-10-09, down from 285,360 thousand on 2026-09-04 (EIA, released 2026-10-15). (Source: eia.gov, accessed 2026-10-16)
In the week ending 2026-10-02 EIA reported the SPR at 283.0 million barrels against 407.0 million barrels a year earlier, and total US crude stocks including the SPR at 707.1 million barrels against 827.2 million. (Source: eia.gov, accessed 2026-10-16)
US commercial crude stocks fell to 415.6 million barrels in the week ending 2026-10-09 from 424.1 million a week earlier; distillate stocks were 102.6 million barrels and motor gasoline 208.3 million (EIA, released 2026-10-15). (Source: eia.gov, accessed 2026-10-16)
EIA's Weekly Petroleum Status Report is normally released on Wednesdays; the 2026-10-15 release was delayed for Columbus Day, and the 2026-11-12 release is delayed for Veterans Day. (Source: eia.gov, accessed 2026-10-16)
On 2026-09-29 DOE offered up to 40 million barrels of SPR crude from Big Hill and Bryan Mound as an exchange, to be returned with additional premium barrels; the release does not state the premium for this offer, while earlier exchanges achieved 25%. Five earlier solicitations awarded more than 133 million barrels, with deliveries scheduled for November and December 2026. (Source: energy.gov, accessed 2026-10-16)
On 2026-10-02 G7 leaders committed to a coordinated release through the IEA of 100 million barrels, starting immediately over four months with a large diesel release in the first 20 days, and asked the IEA for a report within 20 days with recommendations, including on stock replenishment. (Source: pm.gc.ca, accessed 2026-10-16)
On 2026-10-04 seven OPEC+ countries (Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, Oman) kept their September 2026 required production levels for November 2026; they meet next on 2026-11-01. (Source: opec.org, accessed 2026-10-16)
The OPEC+ Joint Ministerial Monitoring Committee, at its 68th meeting, stressed protecting maritime routes, expressed concern about attacks on energy infrastructure, and scheduled its 69th meeting for 2026-11-29. (Source: opec.org, accessed 2026-10-16)
On 2026-10-07 the IEA Executive Director said about 325 million barrels had been released under the March action, that delivering pledged but undelivered stocks would add about 100 million barrels, and that member governments hold about 1.1 billion barrels of public emergency stocks, including over 200 million barrels of diesel. (Source: iea.org, accessed 2026-10-16)
On 2026-10-11 the IEA Executive Director wrote to member governments on tightening diesel markets, citing renewed attacks on energy and civilian infrastructure in Saudi Arabia, and proposed that members behind on pledges speed up releases with diesel first and that all members assess supplemental diesel releases. (Source: iea.org, accessed 2026-10-16)
On 2026-10-15 the IEA Governing Board said about 330 million barrels had been released, agreed to complete the remaining releases of around 100 million barrels, including over 20 million barrels of diesel as soon as possible, said the total will exceed the original 400 million barrels, and said further action would follow an updated assessment focused on diesel. (Source: iea.org, accessed 2026-10-16)