Brent crude back above $110 as Hormuz attacks push wholesale costs higher for US jobbers

Rack prices are climbing again, and the reason is sitting out in the Strait of Hormuz. Brent is $110.30 a barrel and WTI is $99.12, both up more than 1% from Tuesday, which means jobbers buying at the terminal this morning paid more than they did yesterday and will likely pass it down the chain.

The move is crude-driven, not margin-driven, so unbranded and branded loads are feeling it together. If you locked supply contracts off a Brent-linked formula, your landed cost just moved against you.

Hormuz shipping

Attacks on shipping through Hormuz are the fuel under this rally. Traders are pricing in the risk that flows out of the Middle East get disrupted, and that fear carries straight into the crude benchmarks your rack posts track.

Nothing here is a confirmed supply loss yet. It is the threat of one, which is enough to add a risk premium to every barrel. For a marketer, the practical read is that your cost basis could stay jumpy day to day as long as the headlines keep coming.

US inventory draw

The latest US inventory report showed another sizable draw last week, and that added to the bullish push. A draw means less crude sitting in storage domestically, which gives buyers one less cushion when the overseas picture looks shaky.

Tight inventories plus a geopolitical premium is the combination behind the price. Watch how the next official EIA number lands, because a second straight draw could keep upward pressure on wholesale costs into next week.

US-Iran talks

Prospects for US-Iran talks are the one thing that could pull some air back out of the market. The crude outlook right now is a tug between supply risk from the strait and any sign that diplomacy cools the tension.

If talks gain traction, crude could ease and rack prices might soften with it. If the shipping attacks continue and the strait stays in the headlines, your cost basis may hold up here or climb. For now the risk premium is winning.

What to watch

The next EIA inventory print is the near-term number to watch. A third draw would reinforce the tight-supply story; a build could take some premium off.

Watch whether any US-Iran talks move from prospect to schedule, because that is the clearest path to softer crude. And keep an eye on Hormuz shipping reports day by day. As long as vessels are getting hit, the premium stays in your rack cost, and allocation talk could follow if supply actually tightens rather than just looking like it might.