On the evening of 11 November, the naval arm of Iran’s Revolutionary Guards announced that two large crude tankers had been disabled in the Strait of Hormuz after sailing a route Tehran considers closed. Iranian state media blamed mines and published video. Nothing else is confirmed: not the ships’ names, their owners, their cargoes or the extent of the damage. For now this is a statement from Tehran, not an established casualty report. It does fit the trend. Reuters counted 37 merchant ships attacked in the Gulf in October, the highest monthly figure since the war began.
Oil had spent the preceding weeks drifting lower. The market is positioned for a settlement between Washington and Tehran and for Middle East exports to keep recovering. I think that trade prices the wrong thing. It prices the strait. A deal can reopen a waterway in a day. It cannot rebuild what moves through it, or the plants at either end, on anything like the same timescale. The selling has become a reflex. Any statement hinting that Washington and Tehran might agree on something, however procedural, and the front of the curve is marked down within minutes. Then the physical market reasserts itself and the move fades. I am also less sure than the market that Washington is in a hurry. Through the autumn the administration kept raising the pressure on Iran when it could have frozen the confrontation, and it did so with fuel prices climbing into the midterms. A White House that accepted that cost before an election has no obvious reason to pay for a quick deal after it.
Start with the numbers the market leans on. I have stopped taking Hormuz flow estimates at face value. Some of the commercial tracking figures at one point implied more crude leaving the Gulf than before the crisis. Their breakdown attributed roughly half of a 20 million barrel-a-day total to Arabian Sea loadings outside the strait. The only Arabian Sea outlet of any scale is Fujairah, fed by a pipeline with a nominal capacity under 2 million barrels a day. Where do the other eight million come from? The satellite and signals detail that used to accompany such estimates also stopped appearing months ago. Anyone trading off a flow dataset should put that arithmetic to it.
