Oil prices climbed significantly on Friday as market participants reacted to geopolitical risks in the Middle East. Brent crude, the international benchmark, jumped approximately 3.5% to surpass $117 per barrel at its peak, marking the strongest level since April. The rally reflected investor concerns following statements from Tehran that it would target oil infrastructure, undersea cables, datacentres and artificial intelligence facilities in the Gulf region if a new US-Israeli military operation was launched against Iran.
Market analysts attributed the price movement to reports that the United States was considering renewed military strikes on Iran following the midterm elections, rather than pursuing diplomatic solutions. One broker noted that what many observers had anticipated would be a brief conflict has now extended into its eighth month, creating uncertainty about the trajectory of regional tensions. The oil price subsequently retreated slightly to settle around $116 per barrel, still posting a gain of approximately 2.7% for the session.
Regional hostilities have intensified throughout the week. Iran’s Islamic Revolutionary Guards Corps reported striking four commercial vessels in the Strait of Hormuz on Wednesday. The United States State Department directed certain diplomats and families of government employees to leave Saudi Arabia, which has experienced continued attacks from Houthi rebels operating from Yemen. Additional supply concerns stem from Ukraine’s ongoing bombardment of Russian diesel refineries, according to market observers.
For context, Brent crude had traded near $72 per barrel in February prior to the conflict’s outbreak, before climbing to $126 per barrel by the end of April. Analysts pointed to multiple risk factors affecting energy markets, including the safety situation in critical shipping lanes and the uncertain timeline for potential military escalation around the elections on 3 November.
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