Overview
Oil continued to rally on Friday, with Brent trading close to four-month highs as fresh attacks on vessels in the Middle East signaled persistent threats to supply. The price action added to a strong weekly advance for both benchmark crudes after a week of some of the most intense shipping strikes since the conflict began.
Market moves
By 22:30 ET (00:32 GMT), Brent futures were up nearly 0.7% at $108.29 a barrel, while West Texas Intermediate futures rose 0.5% to $102.96 a barrel. Brent climbed as high as $109.97 a barrel during trading, marking its strongest level since early May.
For the week, Brent recorded a gain of 12.4%, its best weekly performance since early July, while WTI finished the week up 12.7%.
Drivers of the rally
Oil had jumped above $100 a barrel earlier in the week after Iran reported it had attacked 10 ships near the Strait of Hormuz and the United States said it had responded by sinking five Iranian tankers. Those strikes were described as among the most severe exchanges in months, underscoring that the conflict had shown little sign of easing as it approached the seven-month mark.
Concerns grew further after reports that Yemen’s Iran-backed Houthi group had seized control of the port city of Mocha, a development said to have strengthened the group’s leverage over the Bab el-Mandeb Strait. Traders noted that continued Houthi activity, including attacks in Bab el-Mandeb and strikes on Saudi energy targets, could threaten another major Middle Eastern export route after the Strait of Hormuz.
Early on Friday, media accounts reported that the Houthis had struck Saudi Arabia’s East-West oil pipeline, igniting six major fires around the facility. Those reports added to market unease about potential supply interruptions and helped push traders to price in a higher risk premium for crude.
Geopolitical outlook
The broader U.S.-Iran confrontation showed limited signs of de-escalation. U.S. President Donald Trump said he expects the war to end immediately after the November midterm elections, while a Wall Street Journal report cited senior White House advisers who envisioned the war extending through the remainder of Trump’s term to early-2029.
Implications
The combination of intensified naval and infrastructure attacks has driven prices higher and led market participants to reassess the premium attached to crude. With active threats to both the Strait of Hormuz and the Bab el-Mandeb transit routes, shipping, refining and energy supply chains are the primary sectors affected by the current volatility.