Brent crude fell 2.48 per cent to US$107.13 a barrel on Monday, shedding US$2.73. On Friday it had briefly touched US$110, its highest since May, after a week of attacks on tankers in the Strait of Hormuz.

President Donald Trump's waiver of penalties under a Russia sanctions law raised hopes of more Russian fuel exports. Yet Brent remains 76 per cent higher than at the start of the year. For Australia, which imports most of its fuel, the cost shows up at the bowser.

The world's oil benchmark

Brent is the global reference for seaborne crude, priced off North Sea grades. Refined fuel prices in Asia and Europe react to the same supply shocks.

How the Iran war rewrote 2026

The 2026 rally is a story of one strait. According to the US Energy Information Administration (EIA), military action on 28 February led to a de facto closure of Hormuz. Iraq, Saudi Arabia and the UAE cut or shut in output.

Brent rose from US$61 a barrel at the start of the year to US$118 by the end of March. The EIA called it the largest inflation-adjusted quarterly rise since 1988.

Prices fell to US$72 by 1 July after a June agreement lifted Hormuz flows. Fighting resumed within a week.

Attacks on Saudi pumping stations, a US blockade of Iranian exports and the 11 September bombing of a Saudi pipeline followed. Brent climbed back above US$100.

OPEC+ has little left to give

On 4 October, the core group led by Saudi Arabia and Russia kept November output targets unchanged. It had already signalled a pause in quota increases until the end of 2026.

The International Energy Agency (IEA) says group output rose 2.1 million barrels a day in September, to 34.8 million. But effective spare capacity was only about 0.27 million barrels a day, with Iraq and Kuwait still below pre-war levels.

The group meets again on 1 November, with a full ministerial meeting on 29 November.

Stocks drained, demand destroyed

The IEA says global stocks are 509 million barrels below end-February levels, and on-land stocks are the lowest since at least 2016. It expects world demand to fall 2.6 million barrels a day this year, to 102.4 million.

Asia has drawn hardest on its tanks. China's crude imports fell 21.5 per cent year on year in September, customs data showed. Vortexa and Kpler both recorded China's largest monthly onshore stock draw in their data series.

North Sea Dated Brent averaged US$116.89 in September, according to the IEA. Goldman Sachs estimates spot Brent carries a risk premium of nearly US$25 a barrel.

Why Brent fell today

The Graham Act waiver lifts the threat of tariffs of up to 100 per cent on the largest buyers of Russian crude and gas. US Energy Secretary Chris Wright also said Gulf flows had recovered to around 80 per cent of pre-war levels.

Kpler put Hormuz transits at 11.62 million barrels a day in the week to 13 October, against a pre-war baseline of 17.15 million. On Friday, a missile aimed at Saudi Arabia's Red Sea port of Yanbu was intercepted.

The EIA sees Brent averaging US$105 in the fourth quarter and US$84 in 2027. Goldman Sachs expects US$90 in December and about US$80 next year.

What it means for Australia

Australian motorists feel Brent at the bowser. The ACCC put average petrol in the five largest cities at 241.9 cents a litre on 14 October, and diesel at 278.5 cents. That is 71.0 cents and 101.9 cents higher than on 20 February.

The ACCC says retail prices largely follow international refined fuel benchmarks, which remain high. Singapore gasoil, the regional diesel benchmark, averaged US$171 a barrel in the week to 14 October.

Risks to watch

If Gulf exports keep rising and OPEC+ restores output, the risk premium could unwind quickly. The Russia waiver could also be reversed after a 60-day review.

Metric

Value

Price (USD/Bbl)

107.131

Daily change

−2.729 (−2.48%)

Weekly change

+0.45%

Monthly change

+6.77%

Year to date

+76.06%

Year on year

+75.60%

Price date

19 October 2026