Brent posts its worst week since 2020 on Iran deal hopes, but diesel is still $6.29

Crude oil had its worst week since the pandemic shock of 2020, but the drop has not reached the diesel pump yet, and nothing in the latest data says it will stay down.

According to Startup Fortune, Brent crude settled at $98.32 a barrel on Friday, November 6, up 3 cents on the day. The outlet calculates that the benchmark fell about 16% over the week from $117.64, the prior Friday's close for the January contract. It reports WTI closed the week at $90.83, down nearly 13%.

The reason is expectation, not an agreement. Startup Fortune says no U.S.-Iran deal exists, though Iran reportedly sent a nuclear proposal through Qatar that asks for an end to the U.S. naval blockade, sanctions relief and unfrozen assets. Traders also read the midterm results as clearing room for a settlement. Phil Flynn of Price Futures Group described it as "a bit of unwinding of the war premium."

The risk is still on the water

The same report says drone and missile attacks in the Strait of Hormuz are continuing, and that a missile strike on an oil products vessel on November 5 killed one seafarer, as reported by Global Banking & Finance. It adds that Washington expanded sanctions on Indian and Turkish firms. Those are not the moves of a market near peace, which is why a week of selling could reverse quickly.

What it means for carriers

Retail diesel moves slower than crude. The EIA's weekly survey put the U.S. on-highway average at $6.292 a gallon on November 2, down 6 cents from $6.352 the week before, according to the EIA. FleetOwner reported on November 4 that this is still $2.539 above a year earlier, and that the West Coast was at $7.272 while the Gulf Coast was at $5.912.

That survey was taken before most of last week's crude slide. If crude holds near $98, pump prices should drift lower in coming weeks, but carriers should not bank on it. Fuel surcharge tables that key off the EIA average will reflect the change with a lag of a week or more.

What shippers and brokers should watch

- The EIA's next weekly diesel number, due Tuesday, November 10, is the first to capture part of the crude drop.
- Any contract where the surcharge schedule resets monthly may lock in a price that is already out of date in either direction.
- Quotes built on current diesel should state the index and the week used, so a swing in crude does not become a dispute.

FleetOwner notes that some experts expect military pressure on Iran could resume now that the midterms are over, which would keep fuel prices uncertain. Plan for both outcomes.

Track the weekly average on PDI's diesel prices page.