Trump: "Iran Making False Claims to Drive Up Oil Prices"... Asian Orders for U.S. Crude Halve (Comprehensive)

U.S. crude oil orders for November delivery expected to hit a 7-year low

U.S. President Donald Trump accused Iran on Oct. 22 (local time) of making false claims, including about attacks on ships, to drive up oil prices ahead of the November midterm elections. Meanwhile, analysts said a sharp rise in freight costs could cause orders for U.S. crude to plunge.

Trump said on Truth Social that day, "Iran is doing everything it can to drive up oil prices ahead of the U.S. midterm elections," adding that it was "making up false claims that attacks hit their targets and claims of mine attacks." He also argued that more crude was passing through the Strait of Hormuz than before the war.

U.S. President Donald Trump. The White House.

Trump cited a Wall Street Journal (WSJ) article to support his remarks. Citing data from Kpler, the WSJ reported that the volume passing through the Strait of Hormuz, together with the volume of ship-to-ship transfers in the Gulf of Oman, averaged about 14 million barrels per day in the week through Oct. 18, or 82% of the level before the war with Iran.

However, when volumes transported through alternative pipelines and other routes are included, total crude flows from the Middle East exceeded an average of 24 million barrels per day. That was more than the 23.3 million barrels per day recorded before the war. Although total crude flows from the Middle East have surpassed prewar levels, the figures cited by the WSJ do not support Trump's claim that the volume passing through the Strait of Hormuz has increased from before the war.

The outlook for U.S. crude exports to Asia points in a different direction. Bloomberg News reported that orders from Asian refiners for U.S. crude for November delivery had fallen about 50% from the previous month to 24 million to 26 million barrels so far this month.

If orders continue at the current pace through the end of the month, they could hit their lowest level in seven years, according to ship-tracking data from Kpler and Vortexa. Orders can still be placed after the trading cycle ends, so the final volume could change, but Vortexa said a significant increase in orders in the near term was unlikely.

The main factor weighing on demand in Asia is tanker freight costs. According to the Baltic Exchange, the cost of shipping crude from the U.S. Gulf Coast to China surged to $79.6 million early this month and has recently stood at about $60 million. That is still more than three times the average of $8 million over the five years before the war.

Randy Hawkins, head of crude trading at Valero Energy, said on a conference call that shipping crude from the U.S. Gulf Coast to Asia costs $30 to $35 per barrel, up by as much as sevenfold from last year. Hawkins said that more tankers are being tied up to transport the same volume of crude because more shipments are being carried through the Strait of Hormuz on smaller vessels and then transferred to larger vessels in the Gulf of Oman.

Meanwhile, international oil prices ended sharply higher that day as attacks by Yemen's Houthi rebels on Saudi Arabia heightened military tensions in the Middle East. West Texas Intermediate (WTI) crude for December delivery rose 2.39% to settle at $99.47 per barrel on the New York Mercantile Exchange. Brent crude for December delivery jumped 4.00% to settle at $113.17 per barrel on the ICE Futures Exchange.

This content was produced with the assistance of AI translation services.