Three weeks of gains. A correction without normalisation.

September began with a renewed rise in the geopolitical premium. At the start of the month Argus recorded only a few transits through Hormuz a day, and Platts JKM reached 25.908 USD/MMBtu. In the second week the IEA confirmed a large loss of supply and stocks, even though it lowered its oil demand forecast.

In the third week the market received a further impulse: after an attack, the Saudi East–West pipeline was shut down. The weekly Brent average then rose to 124.15 USD/b. A week later prices retreated as the number of transits increased and reports emerged of alternative routes and of the conditions for a possible reopening of the strait.

The correction did not mean a return to pre-crisis conditions. Diesel and jet fuel ended the last full week of September 16.3% and 17.1% respectively above the 24–28 August average. Europe raised its gas stocks to 71.54%, but the differences between countries remained very large.

For the week of 28–30 September only the observations of 28 and 29 September were available for Brent and ULSD. For this period we do not set incomplete jet fuel and propane values against a full week.

In September the direction of prices was changed not only by news, but above all by evidence of the availability of routes and product.

Brent accelerated for three consecutive weeks and then corrected. ULSD and jet fuel rose more slowly than crude in the peak phase, but their fall in the fourth week did not remove the product premium. Propane continued to rise even when crude began to get cheaper.

Brent +10.4%, ULSD +8.0%, jet +9.9% against 24–28 August

Data. Argus recorded nine transits through Hormuz on 3 September and three the following day; these levels were far from pre-war traffic. Platts JKM reached 25.908 USD/MMBtu on 2 September.

Brent +12.9%, ULSD +7.0%, jet +8.2% against the previous week

Data. OPEC+ kept its required production for October at the September level. The IEA reported that in August global supply fell by 1.6 mn b/d month on month, and observed stocks by 95 mn barrels.

Brent +11.0%, ULSD +6.0%, jet +3.8% against the previous week

Data. After an attack the Saudi East–West pipeline was closed; according to AP, repairs were expected to take 3–5 weeks. The EIA showed distillate stocks 13% below the five-year average on 11 September.

Brent −5.7%, ULSD −5.1%, jet −5.1% against the previous week

Data. Bloomberg described an increase in shipments through Hormuz, AP pointed to alternative routes, and on 25 September a conditional proposal to reopen the strait emerged. At the same time, diesel exports from the Middle East to Europe were heading for a six-year low.

The market was pricing the difference between declared flow capacity and the actual number of safe voyages.

Argus reported that nine vessels passed through the strait on 3 September, or about 6.5% of pre-war traffic. A day later the number fell to three. The VLCC rate from the Gulf through Hormuz to Asia reached 19.39 USD/b on 2 September, 11.69 USD/b more than on the route starting in the Gulf of Oman.

In the second half of the month evidence of improvement appeared. Bloomberg quoted a US commander’s assessment of a six-month high in shipments, and AP described the use of alternative routes and workarounds. This information lowered the premium for a complete cut-off, but did not restore the pre-war certainty of supply.

The IEA forecasts a fall in world oil demand in 2026 of 2.5 mn b/d, 940 kb/d deeper than in its August report. At the same time global supply in August fell to 100.1 mn b/d, and since February observed stocks have shrunk by a total of 507 mn barrels.

OPEC+ did not raise required output for October above the September level. This was not a declaration of lasting tightness, but a signal that the group did not want to get ahead of uncertain demand or to ignore infrastructure constraints and compensation obligations.

The IEA estimated that combined diesel and gasoil exports from the Persian Gulf and Russia were about 1.6 mn b/d lower in September than in February. S&P Global put diesel exports from the Middle East to Europe at 110 kb/d, the lowest since February 2020.

In the US, distillate stocks rose to 107.9 mn barrels in the week ending 11 September, but were still 13% below the five-year average. In the following week they fell to 107.4 mn barrels. This limited how quickly US exports could ease shortages in other regions.

Distillate requires available refining capacity, hydrogen, energy and a functioning port – not just a barrel of crude.

Platts assessed the October JKM on 2 September at 25.908 USD/MMBtu, the highest since December 2022. From 17 August to early September no LNG carrier passed through Hormuz, and Qatari production remained offline.

On 3 September the European Commission found no immediate threat to supply, pointing to diversification, LNG capacity and lower demand. The IEA proposed a broader set of tools: storage obligations, strategic gas reserves, buffer LNG stocks and flexible commercial contracts.

Between 31 August and 30 September EU storage fill rose from about 65.4% to 71.54%, an increase of 6.14 percentage points. Poland reached 98.96%, Italy 87.10% and France 83.48%. Germany stood at 57.92% and the Netherlands at 58.54%.

The rise in stocks reduced immediate sensitivity to a single cold week, but did not eliminate price risk. The lower level of the largest storage sites and the absence of Qatari LNG increase the importance of the weather, Norwegian availability and Asian competition in October.

IATA reported that global passenger traffic fell by 0.8% y/y in August, while excluding the Middle East it rose by 0.6%. Capacity increased by 0.3% and the load factor fell to 85.1%. At the same time IATA recorded a rise in the jet fuel price in August of 8.3% month on month and 79.2% year on year.

On the US spot market, the average price of US Gulf Coast jet fuel in the week of 21–25 September was 17.1% higher than in the week of 24–28 August, despite a fall of 5.1% from the peak week. Fuel thus remained a burden even after the partial correction.

EASA reported that in 2025 SAF accounted for 2.8% of fuel supplied at EU airports, above the ReFuelEU target of 2%. The European Commission granted operators 5.2 million ETS allowances worth about EUR 430 million to cover part of the cost difference.

At the same time S&P Global described a rapid deterioration in US biodiesel indicators: the BO–HO spread had fallen by more than 72 cents per gallon since the start of the month, and the value of D4 RINs by 16% between 1 and 18 September. The record ULSD margin improved the relative attractiveness of fossil fuel and changed blending incentives.

The Mont Belvieu propane price rose from 0.687 USD/gal in the week of 24–28 August to 0.878 USD/gal in the week of 21–25 September. Over the same period Brent peaked a week earlier and then fell.

The divergence is consistent with the different structure of the LPG chain: the availability of specialised VLGCs, terminal throughput, seasonal petrochemical demand and competition from Asia. Improved crude traffic through Hormuz alone need not immediately lower the cost of LPG.

S&P Global pointed out that the current crisis is affecting fertilisers, sulphur, helium, diesel and jet fuel more strongly than earlier episodes. This means that energy risk passes into industry not only through the price of crude, but also through the shortage of specific by-products and energy carriers.

The most valuable option for October remains the ability to change port, route and delivery date.