NEW YORK, United States / RankWire.AI / – On Friday, oil prices experienced a sharp increase, with Brent crude reaching $110 per barrel for the first time since May. The rally was driven by fears that escalating tensions in the Middle East could lead to further restrictions on supply. Brent for December settlement rose by $3.94, or 3.7%, closing at $109.86, marking its highest close since May 19. Meanwhile, West Texas Intermediate (WTI) gained $3.44, or 3.5%, ending at $101.41, its highest point since September 17. Traders also evaluated Russia’s ability to supply diesel.
Both benchmarks registered significant weekly gains, with WTI soaring 10.4% this week and Brent increasing by 4.9%, marking their second consecutive weekly rise. Brent remained relatively stable on Thursday, when WTI increased by more than 3%. The gap between the two narrowed as WTI outperformed Brent, according to Bloomberg, which noted that Friday’s fluctuation was the first notable move in an otherwise range-bound week. Earlier in October, Brent had surged above $103 before the recent advance.
The primary concern for traders continues to be security threats around the Strait of Hormuz. Over the past 10 days, attacks near the waterway have increased, with Iran claiming to intensify strikes in response to a U.S. blockade of its ports and stricter sanctions imposed last month. Analysts from Kpler stated that 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.
Fuel markets driven higher by diesel supply concerns and refinery disruptions
Concerns about supply extended into refined fuels as well. Ukraine targeted a Russian refinery on Thursday after President Volodymyr Zelenskiy announced Kyiv would abandon a ceasefire on energy sites, previously agreed upon by U.S. President Donald Trump. Industry sources told Reuters that the Ryazan refinery stopped a key crude distillation unit following a drone attack. Dennis Kissler from BOK Financial mentioned that it remains uncertain how much diesel Russia can supply, adding that risks in the Middle East and doubts about Russian deliveries kept traders active in the market.
Diesel futures settled 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 capacity to compensate for Russian supply shortfalls. Although President Trump has stated that Moscow will honor a deal to release Russian diesel into global markets, a bill introduced by U.S. lawmakers on Friday aims to block this arrangement. The outage at Ryazan has added to the uncertainty about whether this fuel will reach consumers soon.
International and U.S. reserves stepping in to stabilize supply
To ease the pressure on supplies, emergency stockpiles are being utilized. The International Energy Agency agreed on Thursday to release over 20 million barrels of fuel, and 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. has already agreed to lend 172 million barrels under a broader initiative by around 30 IEA members to release a total of 400 million barrels.
Experts anticipate that geopolitical risks will continue to support higher prices. Energy Aspects indicated that Brent and WTI reversed earlier losses on Friday, and ongoing escalation risks are likely to sustain the market. Rebecca Babin from CIBC Private Wealth Group explained that traders are factoring in risks after a brief pause, especially ahead of the weekend. Additionally, a significant U.S. crude inventory drawdown, related to hurricane-induced shutdowns, further bolstered prices. Brent concluded the week just below $110.