LONDON / ConSynSer / – On Wednesday, October 21, Brent crude futures increased by $1.21 to reach $110 per barrel, according to Reuters, as tensions in the Middle East heightened concerns in oil markets. Simultaneously, US West Texas Intermediate crude advanced over $1, climbing to $99 a barrel. Early in the trading session, price rises were driven by new incidents involving tankers and Saudi energy facilities. However, these gains were later moderated by signs of recovering Gulf export flows. Currently, Brent trades nearly 80% higher than it did a year ago.
Iran’s Revolutionary Guards reported that naval mines halted three tankers traveling through routes not authorized by Tehran. The UK Maritime Trade Operations agency confirmed that a vessel was struck near Oman. Meanwhile, Yemen’s Houthi movement claimed responsibility for attacks on Saudi Aramco facilities in Yanbu and the Shaybah oilfield, along with assaults on airports in Riyadh and Abha. These events intensified fears over oil supplies passing through the Strait of Hormuz.
Throughout the day, trading volatility persisted. Brent’s price dipped below $108 a barrel after initially gaining. WTI briefly touched $100 but then retreated to below $98. Freight rates in the Persian Gulf remained at record highs, exerting upward pressure on prices. Over the past month, Brent has increased approximately 8%. It had previously rebounded after falling to $100.34 in September, and the current level remains substantially above that test of the $100 mark.
Hormuz oil flows near prewar volumes
Secretary of State Marco Rubio indicated that shipments passing through the Strait of Hormuz are approaching prewar levels. Data from tanker tracking firms Kpler and Vortexa reveal an increase in Middle East crude exports since summer. Producers have intensified shuttle shipments through Hormuz and engaged in ship-to-ship transfers in the Gulf of Oman. Saudi Arabia’s crude exports rose by 7.9% in August, reaching their highest point since March. These increased flows contributed to capping Wednesday’s price rally.
Market participants also analyzed the latest US inventory data. According to the Energy Information Administration, crude stocks declined just over 3 million barrels last week, a smaller drop than the 4.9 million barrels reported earlier by the American Petroleum Institute. US crude production decreased to approximately 13.27 million barrels daily from 13.68 million a week earlier. The mixed signals on US supply indicate ongoing volatility.
Russia’s first diesel shipment to the US and drone attacks escalate
Russia was anticipated to deliver its inaugural diesel cargo to the United States on Thursday, following a deal between President Donald Trump and Russian President Vladimir Putin. Trump suspended Graham Act penalties last week, removing tariffs that would have impacted Russian fuel products. Concurrently, Ukraine has intensified drone strikes targeting Russian oil infrastructure, with Trading Economics suggesting these attacks aim to prevent Moscow’s diesel exports from expanding further.
On Thursday, October 22, oil prices extended gains after a drone strike on Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent crude surpassed $111 per barrel, while WTI moved above $99. Additionally, the US advised certain personnel and their families to evacuate US embassies in Saudi Arabia. Traders continue monitoring Gulf shipping activity, Saudi oil supplies, and Russian fuel exports to anticipate the next price movements.