Oil Prices Rise as Conflicts Disrupt Energy Flows
Crude oil prices climbed Friday as attacks on shipping and energy infrastructure in the Middle East, along with renewed threats to Russian refineries, raised concerns about supplies. Brent futures briefly reached $110 a barrel before settling at $109.86, up 3.7%. U.S. West Texas Intermediate settled at $101.41, a 3.5% increase. For the week, WTI gained more than 10%, while Brent rose nearly 5%.
Saudi Arabia said it intercepted several missiles over the Red Sea on Friday, including one heading toward the Yanbu oil export terminal. Its military also reported destroying three drones elsewhere in the country. The incidents followed other attacks attributed to Yemen’s Houthi militants, including a strike on an Aramco administrative building in Dhahran. An October 10 attack on Riyadh’s international airport killed 12 people and injured more than 300.
In the Strait of Hormuz, at least nine tankers and cargo ships have come under attack since Sunday. U.S. Central Command said Iran sank the container ship GFS Pride on Wednesday; Singapore’s maritime authority said its crew was evacuated safely. The International Maritime Organization reported three seafarers injured and two missing this week. Energy researcher Kpler estimated crude exports through Hormuz at 9.4 million barrels per day for the week ended Wednesday, about 70% of their prewar average.
Meanwhile, a proposed energy ceasefire between Russia and Ukraine has faltered. Russian attacks on Ukrainian infrastructure continued, and Ukrainian President Volodymyr Zelenskyy said Kyiv would resume strikes on Russian refineries.
U.S. diesel averaged $6.33 a gallon Friday, more than 70% above its level a year earlier, according to AAA. U.S. commercial crude inventories also fell by more than 8 million barrels in the week ended October 9. The Energy Information Administration attributed the decline to Gulf Coast production shut-ins caused by Hurricane Isaias.