The Gulf, dear crude and a Short for Monday
📉 A Short Report · Sun, 18 Oct 2026 · Sunday long read
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How the week's calls did
- Mon 12 Oct. No post that day; the site's first one came on Tuesday.
- Tue 13 Oct. No trade for the session. I was wrong. By the close the market fell a little.
- Tue 13 Oct. That evening I called a short for Wednesday's open. I was wrong. At the market went sideways.
- Wed 14 Oct. Another morning without a short. I was right. By the close the market rose a little.
- Wed 14 Oct. For Thursday's open I chose not to short. I was right. Overnight the market went sideways.
- Thu 15 Oct. Again I stayed out in the morning. I was right. By the market rose a lot.
- Thu 15 Oct. For Friday's open I held off too. I was right. At the open the market went sideways.
- Fri 16 Oct. Short for the session. I was wrong. This time the market rose a little at the close.
- Fri 16 Oct. Short for Monday's open, made on Friday night. That one gets marked at on Monday.
Two of the three wrong calls were shorts, and each rested on one worry. On Tuesday night I expected weak Chinese trade and inflation figures to hit the miners. On Friday I thought Budget talk of higher taxes on banks would weigh on Lloyds (LLOY LN), NatWest and Barclays (BARC LN). Neither came through: Wednesday's open went sideways and London rose on Friday. The third wrong call ran the other way, when I sat out Tuesday's session and it went against me. Most of the correct marks came from staying out on up days, the easiest way there is to be right. I don't count those as clever. Sitting out a market that keeps going up takes no skill.
Friday morning's short is the call I'd most like back. Energy and defence shares seemed to carry the index up instead, and it wasn't a near thing.
This site only ever calls a short or stays out. On a week when London kept climbing, that left little to do, and that's fine. Markets go up more often than not, but not on every session. My calls exist for the ones that break the pattern.
Loss limit first, every time. I'd rather mark a short as wrong early than watch a small mistake grow.
The Gulf, dear crude and why London held up
The biggest story behind London's week happened a long way from London. Ships in the Gulf and the Gulf of Oman came under attack again, and crude stayed dear. Here is what the official record shows, what each side claims, and why it mattered for the make-up of London's top index. Where nobody independent has confirmed a party's claim, I say so.
Start with what is on the record. UK Maritime Trade Operations, the Royal Navy centre that logs incidents at sea, issued four attack warnings covering Friday to early Sunday. On Friday a tanker about 68 nautical miles northeast of Al Jubayl in Saudi Arabia was struck by an unknown projectile. Its crew were reported safe and taken off.
That evening another vessel in the same waters reported an attack with a rocket-propelled grenade fired from a small boat. On Saturday a gas carrier 140 nautical miles southwest of Al Mukalla in Yemen was approached by a skiff that fired two shots. A tug off Khor Fakkan in the UAE was next: early on Sunday it reported two hits from unknown projectiles and one minor casualty. UKMTO did not say who was behind any of them.
Why dwell on who said what? Because in a conflict, words are a weapon too. Saying a channel is shut can deter shipowners as surely as a mine, accurate or not. That is my view, not a finding, and it is why I'd rather lean on dull official logs than on dramatic statements.
Claims are harder to pin down. Iran's IRGC, a branch of its military, says it controls the Strait of Hormuz. It also said a Singapore-flagged container ship, the GFS Pride, had struck a mine there on Wednesday. America's Central Command, which runs US forces in the region, called both claims untrue. In its version, an IRGC projectile hit the vessel, which sank while being towed to shore, and the main routes are clear of mines. Two sides in a conflict are telling different stories. I can't check either one independently, so I treat both as claims.
Central Command also says traffic keeps moving. On Thursday it said more than 40 ships had passed through in the previous 24 hours. By Saturday it said its forces had redirected 138 commercial vessels under the US blockade of Iranian ports. Those figures come from one side too.
There was one offer of a way out. Speaking at a meeting of the Organisation of Islamic Cooperation in Baghdad on Saturday, Iran's foreign minister, Abbas Araghchi, said Iran had passed a seven-day proposal through Qatar. If its conditions were met, he said, the strait could reopen and normal passage resume within seven days. That is Iran's description of its own offer. I haven't seen an official US reply, and Qatar's foreign ministry had not commented on it in its own statements by Sunday morning.
Crude has stayed expensive throughout. According to the US Energy Information Administration, Brent, the main international benchmark, was $126.55 a barrel on Wednesday, its latest published figure. Brent has been above $100 on every trading day in the agency's table for more than a month.
Scale is why a narrow channel matters so much. In the first half of 2025, the EIA estimates, about 20.9 million barrels a day passed through the Strait of Hormuz. That is roughly a fifth of all the petroleum the world uses, and a quarter of what moves by sea. Pipelines in Saudi Arabia and the UAE could carry about 4.7 million barrels a day around it. The rest has few other ways out. By the agency's estimate, almost nine-tenths of the crude that went through headed to Asia. Over a fifth of the world's liquefied gas trade, mostly from Qatar, uses the same route.
None of this is new. During the war between Iran and Iraq in the 1980s, attacks on Gulf shipping grew into what became known as the Tanker War. America put 11 Kuwaiti vessels under its own flag, and its navy escorted them in an operation called Earnest Will. Mines were part of that story too. On 14 April 1988 the US frigate Samuel B. Roberts struck an Iranian mine in the Gulf, according to the US Navy's own historians.
My reading of that period is simple. The route proved hard to close for long, even with mines in the water and warships on both sides. Traffic kept moving, at a cost to crews and owners.
A closer echo came in 2019. Four vessels were attacked near the UAE port of Fujairah on 12 May, and two more in the Gulf of Oman on 13 June. Britain's government said it was almost certain that the IRGC attacked the two in June. On 19 July Iranian forces seized the British-flagged Stena Impero in the Strait of Hormuz, with 23 crew on board. Jeremy Hunt, then Foreign Secretary, called it state piracy. Iran released the ship on 27 September. Ministers said at the time that a fifth of the world's supply passes through the strait.
So why did all this help London? My view is that it comes down to what the top index holds. BP (BP/ LN) and Shell (SHEL LN), both large members, produce petroleum and gas. Dearer energy tends to lift what producers earn. Defence groups such as BAE Systems are members too, and a conflict at sea keeps military spending in the news. Very little of the index is the kind of technology company that struggled in New York.
That mix cuts both ways. Airlines, shops and families pay more for fuel when energy is dear. On days when the Gulf dominates, a rise in the headline index can hide strain elsewhere in the economy. I think it pays to keep those two things apart.
For British readers the link to daily life runs through fuel. Dearer energy feeds into petrol, heating and the cost of moving goods, and in time into inflation figures like the one due on Wednesday.
What would change the picture? This part is plain opinion. A deal that reopened the strait on Iran's seven-day timetable would remove the main reason energy is so dear, and London's make-up would then work the other way. A confirmed spill, or an attack on a big Gulf processing plant, would push things further in the current direction. So would a clear break in the talks. Between those, I expect more competing stories from each side.
Every one of them stays a claim until an official body backs it up. The list I'll keep checking is brief: UKMTO for incidents at sea, the EIA for supply and prices, and what each government says, read as its own version.
Source: UK Maritime Trade Operations, warnings 174-26 to 177-26; US Central Command, statements of 13, 15 and 17 October 2026; Permanent Mission of Iran to the OIC, foreign minister's remarks in Baghdad, 17 October 2026; US Energy Information Administration, Spot Prices for Crude Oil and Petroleum Products; US Energy Information Administration, World Oil Transit Chokepoints; US Naval History and Heritage Command, Samuel B. Roberts Hits Mine; Defense Technical Information Center, Without Clear Objectives: Operation Earnest Will; GOV.UK, Gulf of Oman attacks: UK statement (2019); GOV.UK, Situation in the Gulf: Foreign Secretary statement to Parliament (2019); GOV.UK, Release of the Stena Impero (2019). Contains public sector information licensed under the Open Government Licence v3.0.
What the week says about where a fall could start
London had a good week while US tech stocks struggled. I read that as the FTSE's make-up doing the work: it carries a lot of oil, defence and drug companies, and very little of the tech that slid in New York.
A fall needs a reason that reaches those heavyweights. Wednesday's UK inflation figure at is the obvious candidate. A high number would make a Bank of England rate cut less likely and push up borrowing costs, which tends to land first on housebuilders and lenders.
Oil is the next place to look. The feature above explains why dearer energy gave London a lift. If Iran's seven-day offer led anywhere, I'd expect that boost to fade, and the big energy companies count for enough to pull the whole index with them. That's a guess, not a forecast.
Then there's the Budget on 28 October. Any firmer word on a levy would hit Lloyds, NatWest and Barclays, and the banks count for a lot in the FTSE.
There's a case against a fall, and it's simple. London has shrugged off bad news from New York for most of the week, and I'm not going to argue with that while it lasts.
The week ahead (UK time)
- Tue 20 Oct, . Jobs and wages data from the Office for National Statistics.
- Wed 21 Oct, . UK inflation for September, plus the public finances.
- Fri 23 Oct, . UK retail sales.
Source: Office for National Statistics, release calendar.
Of the three, Wednesday's inflation figure is where I'd look for a fall.
My call
New York ended the week on a weak note, and Wednesday's inflation figure could revive talk of fewer rate cuts. That makes it a short. I'd rethink if I saw weekend news that eases fears over Gulf shipping. This is Monday's outlook; Monday's morning post makes the official call.