October WTI crude oil prices rose by $1.99 (+2.32%) to reach a six-week high, while October RBOB gasoline prices increased by $0.0153 (+0.50%) on October 2, 2023. This uptick is largely attributed to escalating tensions between the U.S. and Iran, specifically following fresh hostilities that raised concerns about potential disruptions in energy flows through the Strait of Hormuz. Two oil supertankers were hit by projectiles late Monday during their exit from the Strait, heightening fears of prolonged instability in the region.
The International Energy Agency (IEA) reported that global oil supply deficits are expected to worsen, as oil inventories may fall at double the previously estimated rate. Russian crude oil production also suffered due to intensified drone attacks from Ukraine, dropping to 8.89 million barrels per day (bpd) in July, the lowest level in six years. Concurrently, oil exports from the Persian Gulf have risen to approximately 15-16 million bpd—about two-thirds of pre-war levels—offering some counterbalance to the price increases despite ongoing geopolitical tensions.
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