Oil Is Near a Five-Month High, and Shipping Is Part of the Reason
Oil prices rose toward their highest level since the U.S. and Israel began the Iran war. On Thursday, October 22, 2026, the main cause was soaring tanker rates, which pushed up the cost of moving crude oil by sea. The Guardian reported the same day that prices had jumped to a five-month high. Bloomberg reported that oil gained after deadly attacks in Saudi Arabia raised fears that the fighting could disrupt supply.
Prices have swung hard since the war began. In the first weeks after the U.S.-Israeli attacks on Iran, oil rose above $100 per barrel. A barrel is a unit of oil equal to 42 gallons. Bloomberg reported in early October that prices stayed above that level.
Two main benchmarks track oil prices. Brent is the main global benchmark, and West Texas Intermediate (WTI) is the main U.S. benchmark. Both are quoted through futures, which are agreements to buy or sell oil at a set price on a later date. "Settled" means the closing price for the day.
On October 11, Reuters reported that Brent futures settled up $1.93, or 1.8%, at $106.65 a barrel. That was the highest close since September 15. Brent settled at $106.06 on October 14. On October 15, WTI settled up $2.88, or 3.03%, at $97.97. On October 21, prices barely moved as investors weighed possible progress toward Russia-Ukraine talks.
Shipping has become a big part of the story. Supertanker rates, the price of hiring the largest ships that carry crude, hit a record $1.4 million per day on routes from the Persian Gulf to Asia, according to oilprice.com. The rate rose 40% in the first week of October alone. Then it fell. Reuters reported that shipping costs on the largest tankers dropped in the week of October 16, from their record highs, as demand eased after a wave of attacks on vessels. By Thursday, tanker rates were climbing again, according to MarketWatch.
Shipping costs are also large compared with the oil itself. Reuters reported that in October, freight costs were more than 40% of crude oil's value. An economist quoted by Reuters estimated that every $10-per-barrel rise in shipping costs adds 23 cents per gallon to gasoline. That makes shipping a direct line into the pump price, separate from the benchmark numbers that headlines usually report.
The International Energy Agency's October Oil Market Report describes a similar effect on fuels such as diesel. The agency said that soaring freight rates, and a sharp rise in the delivered cost of crude in September, pushed down the diesel crack for European refiners. The crack is the profit margin refiners, the companies that turn crude into fuel, earn over what they pay for crude. A squeezed margin means higher crude costs do not pass through evenly, and diesel is where that shows up first.
In my view, the striking part of this episode is that shipping, not only the oil field or the battlefield, is setting a large share of what people pay. Think of it like a delivery fee that ends up costing more than the package. The past two weeks show the pattern. Brent was above $106 in mid-October, tanker rates fell sharply the following week, and by October 22 they were rising again. Each move came from a different headline, from ship attacks to Saudi supply worries to Russia-Ukraine diplomacy, and each one reset the market's view of the next barrel.
That is why a five-month high calls for some caution. A high marks a level, not a direction. Shipping prices can change fast when demand for tankers shifts, as the October 16 drop showed. Forecasts that extend Thursday's move, up or down, depend on how long attacks on ships and supply disruptions last. For savers, borrowers, and investors, the practical lesson is that energy costs are set in more places than the crude price alone. The link between the Middle East and the gas pump runs through the tanker market as much as through the oil field.
