Morning Highlights: Iran Says No Talks Until Its Demands Are Met, While Gulf Crude Cargoes Get Cheaper and Brent Puts Hit a Record

Wednesday, October 21, 2026 | 6:45 AM ET

Brent (December) $110.69 | WTI (December) $99.82

Brent +$1.90 (+1.7%), WTI +$2.00 (+2.0%). Brent fell back Tuesday after touching a five-month high near $112. Iranian media said Tehran told Pakistan’s army chief there will be no talks with Washington until its demands are met, and a Qatari delegation arrived in Tehran. API data showed US crude stocks fell 4.9 million barrels in the week ended October 16, with gasoline and distillates also lower. The November WTI contract expired Tuesday, so the WTI price is now December.

Bottom Line

Iran’s stance is the same as last week’s, but the tanker threat has widened. Nournews reported that Iran told Pakistan’s army chief there will be no talks with Washington until its demands are met, though a Qatari delegation arrived in Tehran. Foreign Minister Abbas Araqchi said Iran has had no answer from Saudi Arabia or the Houthis to its offer to help broker peace talks. LSEG analysts warned that Iran is targeting tankers well beyond Hormuz, into the Gulf of Oman, which puts at risk both Gulf crude loadings and the ship-to-ship transfers that carry a large share of regional exports. That is the weak point in the export recovery, since those transfers were already running at capacity last month. Monday’s Houthi claims on Yanbu, the Shaybah oilfield and two airports remain unconfirmed in the reporting available this morning.

Gulf physical crude and futures are telling different stories. Bloomberg reports that the premium of Oman over Dubai fell to near $4 a barrel this week, the lowest since late July and down from above $60 early in the war. Sparta Commodities’ June Goh said Gulf crude has been “pressured” by multiple cargoes being available at short notice. Independent strategist Matias Togni said futures are trading on concern about tighter supply further out. The supply behind that: the IEA says UAE output hit a record in September and Saudi output rose by a third to over 8 million bpd, and Iraq has nearly restored exports by offering discounts of as much as $37 a barrel to regional benchmarks. Rubio said Tuesday that Hormuz flows are close to pre-war levels. That is unverified, and tracking is difficult with ships running dark. It also sits against Kpler’s estimate of Gulf crude flows at about 8.5 million bpd last week. Gulf barrels are easy to find, so the premium in futures reflects what Iran might do next.

The options market shows the hedging behind that premium. Brent put volume hit a record 787,000 lots Tuesday, above the roughly 764,000 record on September 22, and total Brent options volume reached a record 1 million contracts. The most active were December $100 puts at 156,180 lots and $99 puts at 148,063. Large December $99/$100 put spreads traded 88,200 times in blocks, which Bloomberg notes are often hedges for digital positions with a fixed payout. With Brent near $110, these strikes are about 10% out of the money, so the volume is not a simple bearish bet.

On Russian diesel, the first volumes are small against the pledge. Deputy Prime Minister Alexander Novak said, per Vedomosti, that the first tanker for the US leaves Thursday with 40,000 metric tons and that more will follow “to the extent of our capabilities.” Trump said Russia would export 300,000 tons immediately, 500,000 in November and 1 million tons after that, so the first cargo is about 13% of the first tranche. Putin said tankers would leave in two to three days and claimed global diesel prices dropped 5 to 6% on the deal. Kpler’s Michelle Brouhard said it would take an extra 400,000 bpd to materially ease prices, and the initial 2.2 million barrels equals only about 73,000 bpd over a month. Baringa’s Caspian Conran put the need at 850,000 bpd. Braemar’s Mary Melton questioned whether Russian refineries can export more, with by some estimates up to 45% of capacity offline. Energy Secretary Chris Wright said any Russian diesel reaching the US would likely go to New England. Some cargoes are already returning to Turkey and Brazil, and Primorsk loadings have resumed.

Washington is working the domestic side. The Energy Department said it will loan up to 315,000 barrels of heating oil from the Northeast reserve in Maine, Massachusetts and Connecticut through competitive bidding, with deliveries finishing by November 13. That is up to nearly a third of the 1 million barrel reserve. API CEO Mike Sommers said US refiners are running at 95% to 100% of capacity and putting off maintenance, and that using the Defense Production Act to restart idled plants would need a lot of capital. He pointed to China’s spare refining capacity as the key to lower long-term prices. Reuters reported on October 9 that Beijing approved about 3.7 million tons of October fuel exports, so check that against his point. A Chinese embassy spokesperson said a ceasefire in Iran is the key. The IEA’s Fatih Birol said the group is ready to coordinate more stock releases if needed, and retail diesel averaged about $6.32 on Tuesday per AAA.