Brent crude was heading for its steepest weekly fall since the start of the pandemic. The January contract traded at $98.55 a barrel on 6 November, up 0.3% on the day but about 16% lower over the week, Reuters reported, citing LSEG data going back to 19881. US West Texas Intermediate was at $91.09 and set for a 13% weekly decline1.
A later report put Brent at $97.06, down 1.3%, and the weekly fall at more than 17%6. Brent had settled 8.7% lower on Wednesday, below $957.
Why crude fell
Traders read the Democrats' sweep of the House and Senate as raising the odds that Washington will wind down the war with Iran1, 7. ING said the result could mean more scrutiny of the war and more difficulty funding it, though new members of Congress do not start until January7.
Physical signals moved too. Spot premiums for Middle Eastern crude benchmarks returned to levels last seen before the conflict1. Rystad oil market analyst Janiv Shah said the market was loosening toward oversupply1. He pointed to longer voyages and ship-to-ship transfers near Hormuz as workarounds1.
"The market is still looking for evidence of a firm deal being signed (on Iran), or any backlash from either party could tighten fundamentals once more," Shah said1.
What is already falling
Marine fuel came off first. Ship & Bunker assessed Singapore VLSFO at $854.00 a tonne on 6 November, Rotterdam VLSFO at $739.50, Fujairah VLSFO at $865.00 and Houston VLSFO at $770.502. Singapore VLSFO had climbed back above $1,000 a tonne in late October, the first time since March3.
In Asia, the 380-cst high-sulphur fuel oil crack swung from a $5.34 a barrel premium at the start of the week. By 5 November it closed at a $2.29 discount, based on LSEG data8.
Tanker freight is easing from extremes. Dirty tanker rates from Rotterdam to Singapore hit a record of about $168 a tonne in mid-October and were at about $95 a tonne this week8. Gibson said LR2 freight from the Mediterranean to Japan has eased by around a quarter from its mid-October peak9.
Supply stays tight, though. Singapore residual fuel oil stocks were 3% higher in early November than in October, at an average of 19.14 million barrels, with VLSFO lead times of 13 to 15 days10. A Singapore-based fuel oil trader said: "The market is still tight towards the year-end, and there should be some rebound. Freight is still expensive, which makes resupply costs expensive"8.
What is not falling
Diesel barely moved. US on-highway diesel averaged $6.292 a gallon on 2 November, down 0.9% from a week earlier and up 69.2% from a year earlier4. Distillate stocks fell by 3.57 million barrels in the week even as refineries raised utilisation to 94.5%7. Total distillate inventories dropped below 100 million barrels for the first time since 20037.
Air cargo is still a fuel story. Jet fuel prices were up 118.5% on a year earlier in the week to 23 October, according to IATA and Platts data11. Jet fuel makes up around one third of an airline's costs11. Average rates from Hong Kong to North America were $7.64 per kg in October, 34% higher than a year earlier11. They ended the month at $8.17 per kg, up 38.7%11.
Surcharges are still being added, not removed. MSC will extend its Piracy Risk Surcharge of $55 per TEU and its Suez Canal Surcharge of $36 per TEU to all remaining Mediterranean and Black Sea ports from 15 November5. The combined charge is $91 per TEU and stays until further notice5. Swire Shipping will raise its Emergency Bunker Surcharge on shipments from major global regions to Pacific destinations to $535 per 20-foot and $1,070 per 40-foot container from 15 November12. It applies on top of its first-quarter 2026 bunker adjustment factor12. CMA CGM will charge $35 per TEU for Black Sea war risk from 9 November, and from 1 December for the United States, Australia, New Zealand and Latin American countries subject to regulatory filing13. It cited the Joint War Committee's designation of the Black Sea as a war risk zone on 16 September13.
Security risks are behind the piracy and war-risk charges. UKMTO data showed 35 vessels hit in October, the most of any month of the war14. At least five vessels have reported incidents since Sunday14. One seafarer was killed in an explosion believed to be a missile strike on the product tanker MT Velos Sapphire on 5 November15. Iran's Revolutionary Guard Corps said on 6 November that two tankers struck mines and caught fire in the Strait of Hormuz16.
The lag in contracts, and in quotes
Carriers set fuel and risk surcharges by notice, not by the daily crude print. MSC's and Swire's changes take effect on 15 November and MSC's charges stay until further notice5, 12. CMA CGM's start on 9 November13. A buyer shipping in the fourth quarter meets charges set by these notices, not by the week's crude print.
For first-quarter 2027 talks, the direction of travel helps buyers. Xeneta forecasts that global average spot container rates will fall 30% in 2027 and long-term rates 5%, against a third-quarter 2026 baseline17. Chief analyst Peter Sand warned the forecast depends on an orderly return to the Red Sea and Suez Canal17.
Gibson said Asia's naphtha market is now driven more by tanker freight than by crude9. The East-West spread averaged about $65 a tonne in October while Mediterranean to Japan LR2 freight stayed above it9. The propane-naphtha spread narrowed to near zero in late October, with both around $1,040 a tonne9.
What to watch
FGE NexantECA sees little chance of a quick deal. Iranian exports are down to about 200,000 to 300,000 barrels a day via Iraq18.
"Not only are we not close to a resolution, we are even worse than we were before the June MOU," FGE chairman emeritus Fereidun Fesharaki said, adding that renewed strikes are likely18.
ING said the speed of the selloff looks overdone7. BCA Research expects Trump to conduct face-saving strikes and then withdraw6. Iran and the United States are still talking through Qatari mediators, with no announced breakthrough14.
Watch the next bunker assessments, carrier surcharge notices for the first quarter, UKMTO's incident count, US distillate stocks and the Iran talks. Any one of them can move a cost line that crude alone has not.