Brent crude tops $117 on Iran threats

Brent crude oil prices briefly exceeded $117 per barrel on Friday, marking the highest level since April. The international benchmark finished the day just above $116 per barrel, representing a gain of more than 2.7 percent from the previous close. The spike reflects growing anxiety among traders regarding a potential new phase in the Middle East conflict.

The price surge followed declarations from Tehran that outlined specific targets for potential retaliation. Iranian officials stated that if the United States and Israel initiate a fresh joint offensive, Iran will strike oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf region. These assets are central to the digital and energy connectivity of the area.

Market participants reacted to reports that Washington is considering renewed military strikes on Iran. These potential operations appear scheduled for the period following the US midterm elections on November 3. Richard Hunter, a broker at Interactive Investor, noted that this strategic shift was enough to drive the recent price spike. He observed that the conflict, which many initially expected to be brief, is now entering its eighth month.

The current price levels stand in sharp contrast to the pre-war market conditions. In February, before the war with Iran began, Brent crude traded at approximately $72 per barrel. By the end of April, tensions had already driven the price to touch $126 per barrel. The current trajectory indicates that consumers and businesses worldwide continue to face elevated energy costs.

Regional tensions escalated earlier in the week when the Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz. This waterway serves as a critical chokepoint for global oil shipments. Recent incidents have made navigation through the strait increasingly risky for commercial vessels.

US authorities responded to the instability by ordering some diplomats and the families of US government employees to leave Saudi Arabia. The kingdom has faced continued attacks from Houthi rebels based in Yemen. Susannah Streeter, chief investment strategist at Wealth Club, noted that fears are mounting that American and Israeli forces may target Iran’s energy infrastructure after the elections. She added that projectiles are still being fired at maritime traffic crossing the Strait of Hormuz.

Other global factors are also impacting supply chains. Streeter pointed out that Ukraine’s bombardment of Russian diesel refineries is adding pressure to the global energy market. This additional strain complicates an already volatile trading environment.