EIA and IEA Flag Record Tanker Rates as Brent's Spot Premium to Futures Narrows to $6.43

Freight has become one of the largest moving parts in the delivered price of crude and diesel, according to the two main government energy agencies. The U.S. Energy Information Administration said in its October Short-Term Energy Outlook that tanker rates reached record levels in September, reflecting higher insurance costs, and that longer routes around conflict zones are limiting the number of available vessels. ICE Brent December futures settled at $108.79 per barrel on Oct. 20, down 76 cents.

EIA Says Tanker Risk Raises Delivered Crude Prices to Refiners

The EIA said the heightened risk for tankers transiting the Middle East has added to shipping costs, raised the risk premium in oil prices and put additional upward pressure on delivered crude prices to refiners. It expects prices to stay elevated until constraints on Middle East flows ease and inventories can be rebuilt.

The International Energy Agency said in its Oct. 14 Oil Market Report that record freight and crude costs squeezed refinery margins in Europe and Asia, with European diesel cracks falling from about $100 per barrel to near $60 by early October. It warned that tanker-rate pressure spreading to other vessel categories could lift delivered diesel prices in Europe, Africa and Latin America.

IEA Says Oil on Water Rose 103 Million Barrels in September

Longer voyages tie up more crude in transit. The IEA said oil on water rose 103 million barrels in September while on-land stocks fell 113 million barrels, leaving global observed stocks 10 million barrels lower. On-land stocks were at their lowest since at least 2016. Every additional day a cargo spends at sea is a day that oil is unavailable to refiners and adds to charter costs.

Brent Spot Premium to ICE Futures Narrows to $6.43

The EIA's Europe Brent spot price was $115.22 per barrel on Oct. 20, $6.43 above the December futures settlement. That premium was $9.27 on Oct. 19 and more than $20 from Oct. 12 to Oct. 15, as covered in our spot premium report. The narrowing suggests some prompt demand has been met, though the December contract still settled $3.69 above January.

On a 2 million barrel very large crude carrier cargo, the $6.43 spot premium is worth about $12.9 million, down from about $40.9 million on Oct. 15, Oil Authority calculations.

UKMTO Reports Tankers Struck Off Al Faw and Bukha

UK Maritime Trade Operations reported that a tanker was struck by an unknown projectile 30 nautical miles southeast of Al Faw, Iraq, at 1830 UTC on Oct. 20, with the crew safe and no damage reported. At 0145 UTC on Oct. 21, local authorities reported a tanker struck 11 nautical miles west of Bukha, Oman, starting a fire that was extinguished. The tanker is at anchor and all crew are safe.

Trans Mountain Westridge Terminal Exports 529,000 Bpd by Tanker

Canada Energy Regulator data show Trans Mountain delivered about 529,000 barrels per day to the Westridge marine terminal in June 2026, crude that leaves British Columbia by tanker. Those cargoes cross the Pacific rather than Middle East routes, but they compete in a global tanker market where record rates raise the cost of every voyage. Alberta Treasury Board and Finance reported the WTI-WCS differential at US$24.96 on Oct. 15, as covered in our WCS report.

IEA Expects Refinery Runs to Rise From 81.3 to 84.6 Million Bpd

The IEA expects global refinery runs to reach a seasonal low of 81.3 million barrels per day in October and to rise to 84.6 million by year-end. It expects the market to return to surplus in the first quarter of 2027, though not enough to offset the 2026 deficit, and inventory replenishment to be unlikely before the second half of 2027.

The EIA forecasts Brent spot at $105 per barrel in the fourth quarter and $87 by the second quarter of 2027, as workarounds reduce shut-ins. Our Oct. 19 settlement report has the latest curve structure.

EIA Weekly Report on U.S. Crude Exports Due Oct. 21

The EIA publishes its weekly petroleum report later on Oct. 21, including U.S. crude exports, which were 4.57 million barrels per day in the week ended Oct. 9. UKMTO's incident log will show whether attacks continue in the Strait of Hormuz and off Iraq.