Brent closes above $104 as Trump promises no Iran strike before the Nov. 3 midterms

Brent's $4.08 gain means the December contract closed at $100.20 on Oct. 7 ^[15]. That was already back above $100, on the day Axios published its report on strike preparations ^[10]. Before that, the G7's agreement on Oct. 2 to release 100 million barrels of stockpiled crude and diesel had driven several straight sessions of falling prices ^[7]. Spread over four months, the release is about 25 million barrels a month, or roughly 0.8 million barrels a day ^[16]. One report about Pentagon planning took prices back above $100 within a session ^[10][15].

The prospect of the White House staying out made oil cheaper on Oct. 8: expectations of no immediate strike pulled prices off their intraday high ^[6]. Trump's reason for holding off, according to Seoul Economic Daily, is that getting drawn in risks leaving him blamed for rising diesel and gasoline prices at home ^[3]. The same report says analysts warn that US inaction could itself set off a jump before the vote ^[19]. Iranian forces are still striking tankers in the Strait of Hormuz, and fighting between Saudi Arabia and Yemen's Houthi rebels is intensifying, the paper reported ^[19].

For supply, the blockade matters more than the pledge ^[12]. Iran's own crude loadings fell to zero last month, which Seoul Economic Daily says has fed speculation that the Revolutionary Guard has lost control of the strait ^[9]. Crude through Hormuz is back to about 80% of pre-war levels ^[1], so a fifth of the pre-war flow is still missing ^[14].

The pledge covers the 26 days to the vote ^[2][13]. From there, prices can go three ways. If the G7 barrels keep coming and the Red Sea routes that Saudi-backed Yemeni forces began retaking on Oct. 4 stay open, Brent can repeat its early-October slide below $100 ^[7][8][10]. The analysts' version has the pledge holding while Iranian forces keep hitting tankers, and the price climbing with no American action at all ^[19]. The third is a resumed campaign after Nov. 3 against the energy, infrastructure and nuclear targets Axios described ^[10].

I would set energy budgets at Brent near $104 through the winter. The G7 release runs past the vote ^[18], but its effect lasted only until the first report of strike preparations ^[10][15]. The counter-case is that the release, the Red Sea push and the Hormuz shuttles brought prices down once this month and can do it again under the pledge ^[7][8][1]. A Brent settlement back below $100 with the blockade unchanged would show that, and would make $104 too high a planning number. Buyers pricing off WTI start $12.79 lower, though the two quotes are for different delivery months ^[5][17].