Oil prices jumped more than 2% on Friday and settled at their highest levels since the end of April, as traders braced for a potential escalation in the Iran war after the US midterm elections, with an attack on a tanker in the Strait of Hormuz highlighting supply risks.
Brent crude futures for December , which expired on Friday, settled up $2.76, or 2.4%, at $117.64 a barrel, after touching a high of $118. The more active January contract gained $2.63 to $113.43.
US West Texas Intermediate (WTI) crude futures settled $2.12, or 2.08%, higher at $104.12.
For the month, Brent finished 13.6% higher, while WTI rose 15.2%.
“Traders will remain focused on oil flows out of the Middle East and the likely escalation by US and allied forces,” said Dennis Kissler, senior vice president of trading at BOK Financial.
On Friday, a tanker in the Strait of Hormuz was hit by explosive devices attached by a small boat, said the UKMTO, the British maritime security service. It was not immediately clear who was behind the attack in the strait, the key sea outlet for Gulf crude and fuel supplies.
It was the first known successful strike in the waterway using limpet mines, explosives that are attached to a ship’s hull from a small boat, since the US-Israeli war with Iran began in February, maritime sources said.
‘HIGHER LIKELIHOOD OF AN ESCALATION’
The US ordered non-emergency government employees and their family members to leave Saudi Arabia effective October 23 due to safety risks, the US embassy in Riyadh said on Friday, citing Houthi attacks on civilian airports and other critical infrastructure.
Yemen’s Iranian-backed Houthi militants said on Thursday they had attacked several sites in Saudi Arabia, including the large Ras Tanura oil refinery, the Rabigh refinery and a production facility in Abqaiq owned by state oil company Saudi Aramco.
A Saudi-led coalition also said it had intercepted a cruise missile launched by the Houthis towards the kingdom’s western region.
Meanwhile, Qatari mediators returned to Tehran on Friday as part of coordinated efforts to reach a deal between the US and Iran, an official briefed on the talks told Reuters.
US President Donald Trump said on Thursday that Vice President JD Vance had reached out to Iran to help the country get medical supplies, after US media reported Vance had written to Tehran’s top security official to revive peace talks.
Iran has received a letter from Vance, but it has not responded to it yet, Iran’s semi-official Tasnim news agency reported, adding that Tehran wants the US to meet its conditions and “any position that contradicts this framework is unacceptable.”
Oil prices could become even more volatile in the next couple of weeks due to Israel’s recent elections and the US midterm elections on November 3, according to a Saxo Bank briefing on Thursday.
The Danish bank said crude is expected to trade in a higher range of $70 to $90 a barrel even after the conflict ends, compared with a pre-war range of $60 to $70. (Reuters)