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Oil tops $110 as Gulf attacks and refinery strikes rattle markets

Brent crude reaches its highest level since May as three conflicts disrupt energy supplies

By LineZotpaper
Published
Read Time2 min
Crude prices surged on Friday, with Brent briefly touching $110 a barrel for the first time since May, as Iran escalated attacks on shipping in the Strait of Hormuz, Houthi militants fired missiles at Saudi Arabia and Ukraine vowed to keep striking Russian refineries.

Brent futures hit a session high of $110 a barrel before easing to close at $109.86, a gain of 3.7%. US West Texas Intermediate rose 3.5% to settle at $101.41, adding more than 10% over the week, while Brent gained nearly 5%.

Saudi Arabia said it intercepted several missiles fired over the Red Sea on Friday, including one heading towards the oil export terminal at Yanbu, and destroyed three drones near Riyadh and in the kingdom's southern regions. Iran-allied Houthi militants in Yemen have fired repeatedly at Saudi Arabia this week. An administrative building belonging to oil giant Aramco in Dhahran was hit on Tuesday, according to the Saudi energy ministry, and an attack on Riyadh's international airport on October 10 killed 12 people and injured more than 300.

In the Strait of Hormuz, at least nine tankers and cargo ships have come under attack since Sunday as Iran moves to choke off oil exports through the waterway. Iran sank the Singapore-registered container ship GFS Pride on Wednesday, US Central Command said, with the crew safely evacuated. The International Maritime Organization reported three seafarers injured and two missing this week.

Crude exports through Hormuz stood at 9.4 million barrels per day in the week ended Wednesday, about 70% of the average before the Iran war, according to energy researcher Kpler. The 'energy ceasefire' that President Donald Trump tried to broker between Ukraine and Russia has also quickly unraveled, with Ukraine vowing to keep striking Russian refineries. Analysts at Rapidan Energy said three conflicts are now impacting energy flows and fixed energy infrastructure.

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Analysis

Why This Matters

  • Oil above $110 adds upward pressure on petrol, diesel and heating costs, feeding into inflation for households and businesses worldwide.
  • The Strait of Hormuz is a critical chokepoint for global crude supplies, and exports are already running at about 70% of prewar levels.
  • Three conflicts striking at once, Gulf shipping, Saudi energy infrastructure and Russian refineries, raises the risk of a prolonged supply shock.

Background

The Strait of Hormuz is one of the world's most important oil waterways, and Saudi Arabia is among the largest exporters, which makes its terminals and facilities high-value targets. Friday's jump comes as what the source describes as the Iran war has spread to commercial shipping in the waterway, with attacks running since Sunday. At the same time, a fragile ceasefire between Ukraine and Russia over energy infrastructure is coming apart, leaving markets to price simultaneous threats to supply from three directions.

Key Perspectives

Oil analysts and traders: See a growing supply risk premium, with Rapidan Energy pointing to three conflicts simultaneously affecting energy flows and fixed energy infrastructure. Iran-backed forces: Attacks on shipping in Hormuz and repeated Houthi strikes on Saudi territory appear designed to choke off exports and raise the economic cost of the conflict. Saudi Arabia: Has responded by intercepting missiles and drones and defending export terminals, though the strike on Aramco's Dhahran building shows the risk to its energy sector is real. Critics and skeptics: Will ask how much of the price rise reflects barrels actually lost versus fear of escalation, and whether diplomacy can revive the Ukraine-Russia energy ceasefire before refinery strikes deepen.

What to Watch

  • Weekly Hormuz export data from Kpler: any decline from 9.4 million barrels per day would signal the disruption is tightening.
  • Further attacks on Yanbu or other Saudi export terminals, which would extend the supply risk premium.
  • Whether the Ukraine-Russia energy ceasefire can be restored, or whether strikes on refineries continue to escalate.
  • Iran's next moves against shipping through the Strait and the response from the United States and its partners.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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