Oil prices gained on Friday as fresh security incidents in and around the Gulf renewed worries over supply disruptions tied to the ongoing US-Israeli war on Iran, now in its eighth month. The moves pushed benchmarks toward a fourth month of gains.
Price moves
Brent crude futures for December, which expire on Friday, rose $1.20, or 1.04%, to $116.08 a barrel as of 0323 GMT. The more-active January contract advanced $1.39 to $112.19. US West Texas Intermediate (WTI) crude futures increased $1.37, or 1.34%, to $103.37.
For the month-to-date, Brent was on track to finish nearly 11% higher while WTI was heading for about a 14% jump.
Security incidents raise fresh concerns
The UK Maritime Trade Operations (UKMTO) reported that a tanker in the Strait of Hormuz was struck by explosive devices attached by a small boat. The Strait is a critical maritime outlet for Gulf crude and fuel exports. It was not immediately clear who carried out the attack.
Saul Kavonic, head of energy research at MST Marquee, said: "Continued kinetic action around the Strait of Hormuz amidst doubts of a viable diplomatic pathway are keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks."
Separately, the Houthi movement said on Thursday that it had attacked multiple locations in Saudi Arabia, naming the Ras Tanura refinery, the Rabigh refinery and an Abqaiq production facility owned by state company Saudi Aramco. A Saudi-led coalition reported it intercepted a cruise missile the Houthis had launched toward the kingdom's western region.
Diplomatic outreach and corporate responses
US President Donald Trump said on Thursday that Vice President JD Vance had reached out to Iran to assist the country in obtaining medical supplies, following US media reports that Vance had written to Iran's top security official to revive peace talks.
Iran's semi-official Tasnim news agency said the country has received Vance's letter but has not replied. Tasnim added that Tehran wants the US to meet its conditions and described any position that contradicts this framework as "unacceptable."
Amid the security concerns, two sources familiar with developments told Reuters that ExxonMobil and Chevron cancelled plans for their executives to attend the United Arab Emirates' largest oil show next week.
Outlook and market drivers
Ole Hansen, head of commodity strategy at Saxo Bank, warned at a media briefing in Singapore on Thursday that oil markets could become even more volatile over the next couple of weeks owing to Israel's parliamentary election and the US midterm congressional vote. Hansen said the heightened uncertainty made price forecasting difficult, but he expects crude to trade in a higher range of $70 to $90 a barrel compared with the pre-war level of $60 to $70, even after the conflict ends, because of risks of renewed hostilities and the potential need to rebuild inventories.
The combination of recent attacks, continued military activity in strategic shipping lanes and political developments at home and abroad has kept traders on alert for further price swings.
Summary takeaways
- Security incidents in the Strait of Hormuz and attacks on Saudi oil sites have lifted crude prices and reinforced supply risk concerns.
- Brent and WTI posted daily gains and were positioned for substantial monthly increases.
- Political events in Israel and the United States, along with diplomatic outreach to Iran, are adding to near-term uncertainty for oil markets.