NEW YORK, United States / RankWire.AI / – On Friday, oil prices experienced a significant increase, with Brent crude reaching $110 per barrel for the first time since May. The rally was driven by fears that rising tensions in the Middle East could lead to tighter supplies. Brent for December settlement finished up $3.94, or 3.7%, at $109.86, marking its highest close since May 19. Meanwhile, West Texas Intermediate (WTI) rose $3.44, or 3.5%, to $101.41, its peak since September 17. Market participants also evaluated Russia’s ability to supply diesel.
Both benchmarks recorded notable weekly gains. WTI has jumped 10.4% so far this week, while Brent has increased by 4.9%, marking its second consecutive weekly rise. Brent remained relatively unchanged on Thursday, when WTI gained over 3%. The gap between the two narrowed as WTI outperformed Brent. Bloomberg highlighted that Friday’s price movement was the first substantial shift in a week otherwise characterized by sideways trading. Earlier in October, Brent had surged above $103 before the recent upward move.
The primary concern for traders continues to be security risks around the Strait of Hormuz. Over the past 10 days, attacks in the region have increased, with Iran stating it was intensifying strikes in response to a U.S. blockade of its ports and stricter sanctions imposed last month. According to Kpler analysts, these attacks have significantly reduced crude flows from the Gulf. Additionally, a Saudi-led coalition reported intercepting a ballistic missile aimed at Yanbu, a city on the Red Sea, with initial reports indicating no damage, as noted by Rapidan Energy Group.
Refined fuel markets boosted by diesel concerns and refinery disruptions
Worries about supply extend into refined fuels. On Thursday, Ukraine targeted a Russian refinery after President Volodymyr Zelenskiy announced Kyiv would abandon a ceasefire on energy sites previously declared by U.S. President Donald Trump. Industry sources informed Reuters that the Ryazan refinery halted a primary crude distillation unit following a drone attack. Dennis Kissler of BOK Financial expressed doubts about Russia’s ability to supply diesel, noting that ongoing risks in the Middle East and uncertainties over Russian deliveries kept traders active.
Diesel futures closed at $4.90 per gallon in New York, according to Bloomberg data. European diesel futures have more than doubled this year. Refineries elsewhere have increased processing to compensate for Russian supply disruptions. Although Trump stated that Moscow would honor a deal to release Russian diesel into the global market, U.S. lawmakers introduced a bill on Friday to block this arrangement, adding to the uncertainty surrounding the Ryazan outage and the availability of the fuel.
International reserves and U.S. stockpiles help stabilize supply concerns
To mitigate the strain on supplies, emergency stockpiles are being utilized. The International Energy Agency (IEA) agreed on Thursday to release over 20 million barrels of fuel. On Friday, the U.S. Department of Energy issued a request for proposals to exchange up to 17 million barrels from the Strategic Petroleum Reserve. The U.S. had already agreed to lend 172 million barrels as part of a broader plan involving roughly 30 IEA members to release a total of 400 million barrels.
Experts anticipate that geopolitical risks will continue to support oil prices. Energy Aspects noted that Brent and WTI reversed earlier losses on Friday, with ongoing escalation risks underpinning the market. Rebecca Babin from CIBC Private Wealth Group mentioned that traders were factoring in risks again after a brief pause, especially before the weekend. Additionally, a substantial U.S. crude inventory draw, driven by hurricane-related shutdowns, further supported prices. Brent concluded the week just below $110.