Oil prices rose on Friday — set for a fourth monthly gain — as an attack on a tanker in the Strait of Hormuz highlighted the continuing supply risks from the US-Israeli war on Iran, which has entered its eighth month.
Brent crude futures for December, which expire on Friday, advanced $1.20, or 1.04%, to $116.08 a barrel as of 0323 GMT. The more-active January contract gained $1.39 to $112.19.
US West Texas Intermediate (WTI) crude futures climbed$1.37, or 1.34%, to $103.37.
For the month, Brent was on course to finish nearly 11% higher, while WTI was heading for a 14% jump.
On Friday, a tanker in the Strait of Hormuz — the key sea outlet for Gulf crude and fuel supplies — was hit by explosive devices attached by a small boat, the UKMTO said. It was not immediately clear who was behind the attack.
“Continued kinetic action around the Strait of Hormuz amidst doubts of a viable diplomatic pathway are keeping oil prices elevated in expectation of an escalation of the conflict in coming weeks,” said Saul Kavonic, head of energy research at MST Marquee.
On Thursday, the Houthis said they had attacked several sites in Saudi Arabia, including its largest oil refinery, Ras Tanura, the Rabigh refinery and a production facility in Abqaiq owned by state company Saudi Aramco, while a Saudi-led coalition said it had intercepted a cruise missile launched by the Houthis towards the kingdom’s western region.
US President Donald Trump said on Thursday that Vice President JD Vance had reached out to Iran to help the country get medical supplies, after US media reported Vance had written to Tehran’s top security official to revive peace talks.
Iran has received a letter from Vance but it has not responded to it yet, the country’s semi-official Tasnim news agency reported, while adding that Tehran wants the US to meet its conditions and “any position that contradicts this framework is unacceptable.”
Amid the security concerns in the Middle East, ExxonMobil and Chevron have cancelled plans for their executives to travel to the United Arab Emirates’ biggest oil show next week, two sources familiar with the developments told Reuters.
Oil prices could become even more volatile in the next couple of weeks due to Israel’s parliamentary election and the US midterm congressional vote, Ole Hansen, the head of commodity strategy at Saxo Bank, said at a media briefing in Singapore on Thursday.
Hansen said the heightened uncertainty made it difficult to forecast prices, but he expects crude to trade in a higher range of $70 to $90 a barrel, compared with the pre-war level of $60-$70, even after the conflict ends due to the risk of renewed hostilities and the need for inventory replenishment.
(Reporting by Helen Clark and Siyi Liu; Editing by Sonali Paul and Christian Schmollinger)