Brent Crude Surges to $113 as Global Inventories Hit Critical Levels
Brent crude climbed approximately 2% to $113.32 per barrel as concerns over critically depleted global oil inventories and prolonged Middle East supply disruptions intensified.
The International Energy Agency estimated that observed global oil inventories were approximately 509 million barrels below pre-war levels at the end of September. Onshore oil stocks reportedly reached their lowest levels since at least 2016, highlighting the extent of the supply pressure.
Vitol CEO Russell Hardy warned that a shutdown of 10–14 million barrels per day of Middle Eastern exports could push benchmark crude prices towards $200 per barrel. The warning highlights the potential consequences of further disruptions to global energy supplies.
ANZ raised its year-end Brent forecast to $105 per barrel from $95, citing shipping bottlenecks, depleted reserves and limited spare production capacity. Oil transportation efficiency through the Strait of Hormuz remains around 60% of pre-conflict levels despite the recovery in overall flows.
Global crude oil spare capacity currently covers approximately 41 days of demand, down from around 45 days earlier this year. These constraints leave the market vulnerable to further geopolitical disruptions.
US Completes 172 Million-Barrel Strategic Reserve Release; Oil Majors Report Strong Earnings
The US Department of Energy completed the final contract awards for its emergency Strategic Petroleum Reserve release programme, covering nearly 41 million barrels in the latest tranche.
The programme covers approximately 172 million barrels, forming part of a broader International Energy Agency initiative to release 400 million barrels into global markets. Trafigura and ExxonMobil were among the companies awarded contracts.
Meanwhile, elevated refining margins supported strong quarterly earnings across global oil majors. Exxon Mobil reported Q3 adjusted EPS of $4.23, exceeding analyst expectations of $4.08. Its downstream adjusted earnings surged 120% quarter-on-quarter to $9 billion, while upstream earnings declined 20% to $7.3 billion.
Chevron reported adjusted EPS of $5.28, beating estimates by $0.35. Its refining earnings reached a record $4.93 billion. Shell increased share buybacks, while BP recorded its strongest quarterly profit in 18 years, supported by strong refining margins.
The US administration’s emergency reserve release was initiated to ease energy price pressures following the outbreak of the conflict involving Iran.
Key takeaway: Depleted inventories, shipping constraints and geopolitical risks continue to leave the global oil market vulnerable to supply shocks. Emergency reserve releases are providing additional supply, while high refining margins are boosting downstream earnings for major energy companies.
Why did Brent crude rise above $113?
Concerns over depleted global inventories, Middle East supply disruptions and shipping constraints supported oil prices.
What is Vitol’s $200 oil warning?
Vitol CEO Russell Hardy warned that a shutdown of 10–14 million barrels per day of Middle Eastern exports could push benchmark crude prices towards $200.
What is ANZ’s year-end Brent forecast?
ANZ raised its forecast to $105 per barrel from $95.
How much oil does the US Strategic Petroleum Reserve programme cover?
The programme covers approximately 172 million barrels.
Why are oil companies reporting strong refining earnings?
Disruptions to global refining capacity and tighter diesel supplies have supported refining margins.
