Oman crude for November delivery climbed $5.15 to $121.68 a barrel on Wednesday, extending a sharp rally as escalating Middle East hostilities tightened physical supplies and intensified concern over export routes from the Gulf.The Gulf Mercantile Exchange’s Oman crude marker confirmed the September 9 price at $121.68, up from $116.53 a day earlier. The rise followed an $11.99 jump in the previous trading session, when the November contract advanced to $116.53 from $104.54, underscoring the speed with which geopolitical risk has been repriced into the regional benchmark.
The latest level is the highest for Oman crude since April and places the Gulf benchmark well above Brent futures, reflecting acute tightness in physical Middle Eastern barrels. Premiums for Dubai and Oman cargoes loading in November have risen to more than $20 a barrel above Dubai-linked quotations, signalling stronger competition for prompt sour crude supplies.
The widening gap between Oman and Brent highlighted the premium buyers were paying for immediately available Gulf sour grades, even as futures remained comparatively restrained by continued exports and softer demand elsewhere.
Global benchmarks also strengthened sharply on Wednesday as the conflict between the United States and Iran escalated and attacks widened around key oil infrastructure and shipping lanes. Brent crude settled at $101.21 a barrel, up 3.4 per cent, after trading as high as $101.55. West Texas Intermediate finished at $96.05, gaining 3.3 per cent.
Supply concerns have centred on the Strait of Hormuz, the narrow waterway that handled roughly a fifth of global oil and gas trade before the current conflict. Traffic through the strait has fallen substantially, while Gulf producers have relied more heavily on pipelines and alternative loading routes to maintain exports.
Market anxiety increased after Iran said it had attacked 10 vessels in retaliation for US strikes on Iranian tankers. The United States has also targeted Iranian shipping, while attacks by Yemen’s Houthi movement on Saudi energy facilities and crude routes through the Red Sea have added another layer of risk to regional supply.
Despite the disruption, significant volumes continue to leave the Middle East. Vitol chief executive Russell Hardy said about 9 million barrels a day of crude and another 1 million barrels a day of refined products were still being exported from the region, compared with roughly 20 million barrels of crude and products before the Iran war began on February 28.
That continuing flow has helped prevent an even steeper rise in international futures, while higher production outside the Middle East and weaker demand in some major consuming economies have provided additional restraint. China’s seaborne crude imports fell sharply during July and August, and large inventories held by the country have reduced immediate pressure on global buyers.
The physical market, however, is showing greater stress than headline futures prices. Argus chief economist David Fyfe said conditions were “incredibly tight”, pointing to elevated crude premiums and severe shortages in diesel markets. Diesel prices have climbed strongly as refiners face constrained feedstock supplies and rising demand for middle distillates.
Banks have responded by lifting price forecasts. Morgan Stanley expects Brent to average $100 a barrel in the fourth quarter, while HSBC has raised its 2026 and 2027 Brent projections to $90 and $85 respectively. Goldman Sachs increased its December 2026 Brent forecast by $5 to $85 and its West Texas Intermediate estimate to $80, citing expectations that Middle East shipping disruptions will persist into next year.
Oman’s crude benchmark has particular significance because it is widely used in pricing Middle Eastern sour crude sold into Asia. The Gulf Mercantile Exchange determines its daily marker from trades in the nearby contract during a five-minute pricing window ending at 4.30pm Singapore time, using executed prices, bids, offers and market conditions to establish the official marker.
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