Iran Claims Seven Ships Hit in Gulf as Brent-WTI Gap Widens to $12.11, Covering 60.6% of a $40 Million Supertanker Freight Bill

Iran's Revolutionary Guard Navy said on Thursday it hit seven vessels in the Persian Gulf and near the Strait of Hormuz, Oilprice.com reported, citing Reuters. Brent crude futures rose 1.7% to $110.63 per barrel at 07:36 UAE time on ICE, per The National. WTI gained 1.4% to $98.52 per barrel. The gap between the two benchmarks stood at $12.11.

What Iran Claims, and What Is Unverified

The Guard said four tankers conducting ship-to-ship oil transfers in the northern Gulf were hit and set on fire. It said three more vessels struck mines west of the strait. Iran supplied no vessel names, flags or casualty figures, and the claims are not independently verified.

BOK Financial analyst Dennis Kissler said at least two more ships were struck overnight, per FinanceFeeds. LSEG analysts said Iran is now targeting tankers beyond Hormuz into the Gulf of Oman.

Diplomacy is moving in parallel. Iranian Foreign Minister Abbas Araqchi wrote in the Financial Times that Tehran has given the US a seven-day plan through mediators to end the war and reopen the strait. President Masoud Pezeshkian said Washington cannot expect dialogue while blockading Iran.

The Brent-WTI Gap, Explained in Cargo Terms

Our earlier report logged Brent at $109.55 and WTI at $103.66, a $5.89 spread ahead of WTI contract expiry. Today's $12.11 spread is more than double that reading. Part of the widening is a roll effect, since expiry weeks tend to compress the front spread.

A $12.11 spread is worth $24.2 million on a 2 million barrel supertanker cargo of US crude sold at Brent-linked prices. Our earlier piece on oil freight at $20 a barrel put the cost at $40 million per supertanker cargo. On that route, the spread covers 60.6% of freight and leaves a $15.8 million shortfall.

Freight and the spread therefore pull in opposite directions for US exporters. The wider Brent premium invites exports, while war-risk freight keeps most of the margin with shipowners. Each $1 the spread widens adds $2 million to a cargo, and each $1 of freight removes the same amount.

Supply Signals Pointing the Other Way

Trading Economics reported that crude exports through Hormuz have recovered toward pre-conflict levels, though refined product shipments remain constrained. That split explains why diesel carries a premium even when crude flows improve. FinanceFeeds cited Kissler as saying progress on Ukraine talks could unlock tight global diesel supplies.

Steve Witkoff met Vladimir Putin in St Petersburg, and the Kremlin said talks could resume as early as November, per FinanceFeeds. A confirmed date is one condition in FinanceFeeds' $105 bear case. Its base range runs $108 to $112, and its $113 bull case needs a strike that takes Saudi barrels or the East-West pipeline offline.

The outlook sources split on direction. FinanceFeeds sets reference levels without forecasting, while Trading Economics models Brent at $113.86 for the fourth quarter and $130.36 over 12 months. Brent is up 8.93% over the past month and 71.98% year over year, per Trading Economics.

What to Watch Today

The EIA weekly petroleum report, which covers the week ending October 16, already showed a 3.1 million barrel commercial crude draw on Wednesday, as covered in our inventory report. Baker Hughes publishes its rig count on Friday. Traders will also watch for independent confirmation of the Gulf of Oman tanker incidents.