Oil Rebounds From Two-Month Low as Hormuz Attacks Offset Iran Peace Hopes; Saudi Output Surges

Oil prices bounced back on Wednesday, Nov. 11, from a two-month low, as fresh attacks on tankers in and around the Strait of Hormuz outweighed hopes for de-escalation in the war with Iran ^[1][2][3].

Brent crude, the international benchmark, rose $1.04, or 1.1%, to $92.53 a barrel in early trading, while U.S. West Texas Intermediate gained 67 cents, or 0.8%, to $86.71 ^[2]. The gains narrowed as the day went on: by late morning in Europe, Brent was up 0.2% at $91.71 and WTI was up 0.1% at $86.12 ^[1]. The rebound came a day after both benchmarks fell more than $3 a barrel when U.S. officials played down the chance of further military action against Iran ^[3].

Attacks at Sea Keep Traders on Edge

The strait, which normally carries about one-fifth of the world's oil, remains dangerous ^[1]. Data from the Washington Institute for Near East Policy showed 37 vessels attacked in the region in October, the most in any month since the fighting began ^[2], with 10 more attacks recorded so far in November ^[3]. On Tuesday, the UK Maritime Trade Operations agency reported a tanker attack off the coast of Oman, and Iran's Revolutionary Guards said tankers had caught fire after striking mines ^[2][3].

On Wednesday, Iran's army said another tanker hit a mine and caught fire in what Iranian naval forces called an "unsafe, prohibited area" in the east of the strait ^[1]. India's shipping minister, Sarbananda Sonowal, said a Liberia-flagged tanker carrying Indian sailors was struck by a projectile in the Gulf, injuring four crew members ^[1].

Tehran has tightly restricted traffic through the strait since the war broke out in late February, requiring ships to use routes it authorizes ^[1]. The United States has imposed a naval blockade on Iranian ports and has helped tankers make the transit; U.S. Central Command said last month it had helped Gulf countries export 1.5 billion barrels of oil through Hormuz since the summer ^[1]. The U.S. military has also said all mines have been cleared from the strait, even as Iran keeps blaming mines for the ship fires ^[1].

Diplomacy is the other half of the story. Hopes for a breakthrough had pushed prices down, but an Iranian security official indicated the two sides were not holding negotiations, which helped lift prices again ^[3]. Analysts at Sparta Commodities called Iran's willingness to meet U.S. demands "the central variable affecting the price of oil" ^[2]. LSEG's oil research team cautioned that even a deal would not quickly restore normal shipping, since that depends on mine clearance, insurance costs and shipowners' willingness to take the risk ^[2].

Saudi Barrels Come Back

Supply news pointed the other way. Saudi Arabia told OPEC that its crude production climbed to 10.563 million barrels a day in October, up about 26% from 8.372 million in September and the kingdom's highest output since the war began, according to the figures it reported ^[5]. That is close to the 10.882 million barrels a day it reported for February, the last month before the war ^[5]. Across OPEC+, output rose by 2.04 million barrels a day in October to 41.23 million, based on secondary-source estimates ^[5].

Reuters reported that the group's October production is now nearing its pre-war rate, driven by the sharp Saudi increase, despite continued disruption to shipments through Hormuz ^[4]. OPEC+ has kept its December output targets unchanged ^[5].

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Other forces are also weighing on prices. Industry data from the American Petroleum Institute showed U.S. crude inventories rose by 9 million barrels in the week ended Nov. 6 ^[3]. Sparta said the end of the U.S. midterm elections and rising Middle East oil flows are adding downward pressure ^[2]. In Russia, refining capacity has reportedly fallen about 30% since late October after Ukrainian drone strikes ^[3].

What It Means at the Pump

For American families, the trend has finally been moving in the right direction. AAA's latest national average for regular gasoline was about $3.98 a gallon, just under the $4 mark, down from about $4.15 a week earlier and $4.37 a month earlier ^[6]. That is still well above the roughly $3.07 drivers were paying a year ago ^[6].

More Saudi and Gulf crude reaching the market is the kind of supply that can keep that relief coming as families plan holiday travel. But traders are watching three things that could cut the other way: whether Washington and Tehran resume real talks, whether attacks on shipping keep climbing after October's wartime high, and how fast mine clearance and insurance costs allow tanker traffic to return to normal ^[2][3]. Until the strait is safe, every tanker fire is a reminder that the war still carries a price at the pump.