NEW YORK, United States / RankWire.AI / – On Friday, oil prices experienced a sharp increase, with Brent crude reaching $110 a barrel for the first time since May. The rally was driven by fears that escalating tensions in the Middle East could lead to further disruptions in supply. Brent for December delivery closed up $3.94, or 3.7%, at $109.86, marking its highest finish since May 19. Meanwhile, West Texas Intermediate (WTI) rose by $3.44, or 3.5%, to $101.41, reaching its highest point since September 17. Traders also evaluated Russia’s ability to supply diesel.
Both benchmarks posted significant weekly gains. WTI has climbed 10.4% so far this week, while Brent has increased by 4.9%, marking its second consecutive weekly rise. On Thursday, Brent remained relatively stable, whereas WTI gained over 3%. The gap between the two narrowed as WTI outperformed Brent. Bloomberg noted that Friday’s swing was the first sizeable movement in a week otherwise characterized by range-bound trading. Earlier in October, Brent had surged above $103 before the latest upward movement.
The primary concern for traders continues to be security risks around the Strait of Hormuz. Over the past ten days, attacks in the region have increased, with Iran stating it was intensifying strikes in response to a U.S. blockade of its ports and the tougher sanctions imposed last month. Analysts from Kpler reported that these attacks have significantly reduced crude flows from the Gulf. A coalition led by Saudi Arabia announced it intercepted a ballistic missile aimed at Yanbu, a city on the Red Sea, with initial reports indicating no damage, according to Rapidan Energy Group.
Fuel markets supported by diesel concerns and refinery disruptions
Supply concerns extended beyond crude oil to refined fuels as well. Ukraine targeted a Russian refinery on Thursday after President Volodymyr Zelenskiy declared that Kyiv would abandon a ceasefire on energy-site operations, previously announced by U.S. President Donald Trump. Industry sources told Reuters that the Ryazan refinery stopped a primary crude distillation unit following a drone attack. Dennis Kissler from BOK Financial expressed doubt about Russia’s capacity to deliver diesel, noting that Middle East risks and Russian supply uncertainties kept traders cautious but active in buying.
Diesel futures closed at $4.90 per gallon in New York, according to Bloomberg data. European diesel futures have more than doubled this year. To compensate for the Russian shortfall, refineries elsewhere have increased processing rates. Although 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 that arrangement. The outage at Ryazan adds to the uncertainty about whether the fuel will reach buyers in the near term.
International reserves and U.S. stockpiles aim to stabilize supply
To mitigate supply disruptions, emergency stockpiles are being mobilized. The International Energy Agency (IEA) agreed on Thursday to release over 20 million barrels of fuel. The U.S. Department of Energy followed suit on Friday, issuing a call for proposals to exchange up to 17 million barrels from the Strategic Petroleum Reserve. The U.S. had already committed to lending 172 million barrels as part of a broader effort involving about 30 IEA members to release a total of 400 million barrels.
Market analysts anticipate that geopolitical risks will continue to support oil prices. Energy Aspects noted that Brent and WTI reversed earlier losses on Friday, with ongoing escalation risks likely to keep the market supported. Rebecca Babin of CIBC Private Wealth Group mentioned that traders are re-pricing risk after a brief pause, especially ahead of the weekend. Additionally, a significant U.S. crude inventory drawdown linked to hurricane-related shut-ins further bolstered prices. Brent finished the week just below $110.