Brent crude futures touched $110 a barrel on Friday for the first time since May. Iran's attacks near the Strait of Hormuz, Houthi missile fire at Saudi Arabia and Ukraine's pledge to keep striking Russian refineries drove the move.
Brent futures hit a session high of $110 per barrel on Friday, the first time since May, as Iran escalated attacks in the Strait of Hormuz. Prices eased slightly afterward, and Brent closed at $109.86, a gain of 3.7%.
U.S. West Texas Intermediate rose 3.5% to settle at $101.41 per barrel. For the week, WTI added more than 10% while Brent advanced nearly 5%.
Hormuz attacks and Saudi interceptions tighten supply fears
At least nine tankers and cargo ships have come under attack since Sunday as Iran tries to choke off oil exports through the waterway. U.S. Central Command said Iran sank the container ship GFS Pride on Wednesday.
Crude shipments through Hormuz stood at 9.4 million barrels per day for the week ended Wednesday, about 70% of the average before the Iran war, according to Kpler. Iran said it was stepping up strikes in response to the US blockade of its ports and tougher sanctions introduced last month, Reuters reported.
Meanwhile, Saudi Arabia intercepted several missiles fired over the Red Sea on Friday, including one heading toward the Yanbu export terminal, a military spokesman said. Reuters noted that the port is critical for Saudi Arabia's efforts to bypass the Strait of Hormuz.
Ukraine ends the energy ceasefire
The "energy ceasefire" that President Donald Trump tried to broker between Ukraine and Russia has quickly unraveled. Russia's Ryazan refinery suspended operations at a primary crude distillation unit after a drone attack on Thursday, two industry sources told Reuters.
Dennis Kissler of BOK Financial told Reuters: "Conflict in the Middle East still keeps coming back". He added that he thinks it is questionable how much diesel Russia can actually deliver to the markets.
Reserve releases and a US inventory draw
To boost supply, the International Energy Agency agreed on Thursday to release more than 20 million barrels of fuel to the market. The Department of Energy said on Friday it issued a request for proposal for an exchange of up to 17 million barrels of crude from the Strategic Petroleum Reserve.
Separately, US commercial crude inventories fell by more than 8 million barrels in the week ended Oct. 9 because of Gulf Coast production shut-ins, according to the Energy Information Administration.
Energy Aspects said in a note that persistent escalation risks will keep flat prices supported.
Sources: CNBC, Investing.com
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