Oil Prices Hit Five-Month High as Middle East Tensions Escalate
Brent crude reached approximately US$114 a barrel, its highest level since May, driven by Houthi attacks on Saudi Arabia and the ongoing U.S.-Iran war. West Texas Intermediate traded above US$100 as refined-product prices surged amid constrained shipments.
Brent crude oil climbed to around US$114 a barrel on Friday, reaching its highest level since May. West Texas Intermediate was trading above US$100. Brent has risen more than 85% this year as the U.S.-Iran war approaches its ninth month.
The price surge follows intensified attacks in Saudi Arabia. Iran-backed Houthi militants claimed recent strikes on the Saudi Red Sea port of Yanbu, as well as deadly attacks on a Saudi oil field and airport. On Thursday, state-owned Aramco evacuated its Dhahran headquarters after an alarm and asked staff to work from home.
U.S. President Donald Trump told reporters that the United States has "knocked" out Iran and threatened to go "a little bit further." The New York Times reported that the U.S. and Israel have developed plans for renewed strikes against Iran after the American midterm elections early next month. Mike Waltz, Trump’s Ambassador to the United Nations, stated the U.S. could be mired in a stalemate with Iran a year from now.
While crude exports through the Strait of Hormuz have recovered to near prewar levels, oil-product shipments remain constrained. Refined-product prices, especially diesel, have risen faster than crude due to these supply limitations and Ukrainian attacks on Russian refineries. Governments are tapping stockpiles to manage the supply constraints, and threats of widened hostilities around the Strait of Hormuz continue to weigh on markets.