NEW YORK, United States / RankWire.AI / – On Friday, oil prices surged significantly, with Brent crude reaching $110 a barrel for the first time since May. The rally was fueled by concerns that escalating Middle East conflicts could lead to tighter supply. Brent for December settlement increased by $3.94, or 3.7%, closing at $109.86, marking its highest since May 19. Meanwhile, West Texas Intermediate climbed by $3.44, or 3.5%, to $101.41, its peak since September 17. Market participants also evaluated Russia’s ability to supply diesel.
Both benchmarks recorded notable weekly gains, with WTI rising 10.4% and Brent adding 4.9%, marking a second consecutive weekly increase. On Thursday, Brent remained relatively stable while WTI gained over 3%, causing the spread between the two to narrow as WTI outperformed Brent. Bloomberg noted that Friday’s fluctuation was the first substantial movement in an otherwise range-bound week. Earlier in October, Brent had surged above $103 before the latest upward move.
Traders remain predominantly concerned about security threats around the Strait of Hormuz. In recent days, attacks targeting the waterway have increased, with Iran announcing intensified strikes in response to a U.S. blockade of its ports and stricter sanctions imposed last month. According to Kpler analysts, these attacks have sharply reduced crude flows from the Gulf. Additionally, a Saudi-led coalition reported intercepting a ballistic missile aimed at Yanbu, a Red Sea city, with initial assessments indicating no damage, as stated by Rapidan Energy Group.
Fuel markets see support from diesel concerns and refinery disruptions
Supply anxieties have extended into refined fuels. Ukraine targeted a Russian refinery on Thursday after President Volodymyr Zelenskiy declared Kyiv would abandon an energy-site ceasefire announced by U.S. President Donald Trump. Industry sources told Reuters that the Ryazan refinery halted a primary crude distillation unit following a drone attack. Dennis Kissler from BOK Financial commented that it was uncertain how much diesel Russia could supply, noting that risks in the Middle East and doubts over Russian exports kept traders engaged.
Diesel futures settled at $4.90 per gallon in New York, according to Bloomberg data. Diesel futures in Europe have more than doubled this year. To compensate for Russian supply disruptions, refineries elsewhere have increased processing capacity. Although Trump has stated Moscow will honor a deal to release Russian diesel into global markets, U.S. lawmakers introduced a bill on Friday to block this arrangement. The outage at Ryazan adds uncertainty over whether the fuel will reach consumers soon.
Reserves and strategic stockpiles help mitigate supply concerns
Emergency reserves are being tapped to alleviate supply pressures. The International Energy Agency agreed on Thursday to release over 20 million barrels of fuel. The U.S. Department of Energy followed suit on Friday, issuing a request for proposals to exchange up to 17 million barrels from the Strategic Petroleum Reserve. The U.S. had already committed to loan 172 million barrels under a broader plan by roughly 30 IEA members to release a total of 400 million barrels.
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 maintaining market support. Rebecca Babin of CIBC Private Wealth Group stated traders are factoring in risk again after a brief pause, especially ahead of the weekend. A significant U.S. crude inventory draw, linked to hurricane-related shutdowns, also contributed to higher prices. Brent finished the week just below $110.