NEW YORK, United States / RankWire.AI / – Brent crude reached $110 a barrel on Friday, marking its first breach of this level since May amid escalating Middle East conflicts that heightened concerns over supply constraints. Brent futures for December delivery closed $3.94, or 3.7%, higher at $109.86, the highest since May 19. Meanwhile, U.S. West Texas Intermediate crude for November delivery increased by $3.44, or 3.5%, to $101.41, its peak since September 17. Investors also considered Russia’s potential diesel exports to the global market.
The rally capped a strong week for both benchmarks, with Brent climbing 4.9% so far and marking its second consecutive weekly gain. WTI surged 10.4% over the same period. On Thursday, Brent remained relatively unchanged while WTI settled more than 3% higher. The move on Friday broke a week characterized by limited fluctuations, according to Bloomberg. Earlier in October, Brent had topped $103 before the recent push toward $110.
Over the past ten days, attacks near the Strait of Hormuz have intensified. Iran announced it was increasing strikes in response to a U.S. blockade of its ports and stricter sanctions introduced last month. Kpler analysts noted that these attacks have significantly reduced Gulf crude flows. They anticipate a sluggish and uneven recovery without a comprehensive political agreement. Rumors of assaults on Saudi energy infrastructure have also reignited fears of broader escalation.
Russian diesel exports fuel market concerns
Uncertainty surrounding Russian fuel supplies added to the upward pressure on prices. After President Volodymyr Zelenskiy stated Kyiv was abandoning a previously announced energy-site ceasefire, Ukraine attacked a Russian refinery on Thursday. Two industry sources told Reuters that the Ryazan refinery halted a primary crude distillation unit following a drone strike. Dennis Kissler of BOK Financial commented that the extent of Russian diesel supply to the market remains uncertain.
The fuel market has tightened alongside crude, with diesel futures settling at $4.90 a gallon in New York on Friday. Contracts for diesel and gasoline are trading at their highest seasonal levels on record, according to Bloomberg. President Trump indicated that Moscow will follow through on a deal to release Russian diesel to global markets. However, a bill introduced by U.S. lawmakers on Friday seeks to block this arrangement. The attack on Ryazan has raised questions about the timing and volume of additional Russian supply.
Strategic stock releases aim to mitigate supply pressures
Governments are actively releasing emergency reserves to alleviate supply concerns. The International Energy Agency agreed on Thursday to release over 20 million barrels of fuel. On Friday, the U.S. Department of Energy issued a request for proposals to exchange up to 17 million barrels of crude from the Strategic Petroleum Reserve. Previously, Washington committed to loan 172 million barrels as part of a broader plan with about 30 IEA member countries to release a total of 400 million barrels.
Market participants continue to price in the risk of further disruptions. Rebecca Babin, senior energy trader at CIBC Private Wealth Group, noted that risk premiums are returning to prices after a brief respite, especially as the weekend approaches. Analysts from Energy Aspects highlighted that ongoing escalation risks are likely to keep prices supported. Additionally, a significant U.S. crude stock draw, driven by hurricane-related production shutdowns, provided extra upward momentum. Brent concluded the week just below the $110 threshold.