Brent crude futures closed at $116.35 per barrel, up $3.55 or 3.14%. On Friday, the price surged to as high as $117.45, marking the highest level in nearly six months. Meanwhile, U.S. West Texas Intermediate (WTI) crude also rose by $3.80 or 3.8%, closing at $103.27 per barrel.
Reasons for the Increase in Oil Prices
Brent oil ended the week with a 6% increase, while West Texas Intermediate rose by 2.3%. Adam Trenkewitz, senior asset strategist at LPL Financial, analyzed the situation, stating: "Concerns over supply disruptions were the main driver of this price increase, especially after Yemeni forces launched a series of attacks across Saudi Arabia, including on energy infrastructure."
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Impact of Conflicts on the Energy Market
Saudi Aramco issued an evacuation order for its headquarters in Dhahran last Thursday. Conflicts between Saudi Arabia, the world's largest crude oil exporter, and Yemeni forces are sharply escalating. Meanwhile, the UAE's Ministry of Climate Change and Environment reported an oil spill from a tanker off the coast of Umm Al-Quwain. Authorities have yet to identify the tanker in question.
Andrew Lipow, president of energy consulting firm Lipow Oil Associates, stated: "The market is concerned about the continuation of attacks on tankers, which appear to have increased over the past week." According to data collected by a Washington-based think tank, October has been the worst month for security incidents involving commercial vessels in the Strait of Hormuz and its adjacent waterways.
On Friday, ship tracking data indicated that the first shipment of Russian diesel to the U.S., sent after an export agreement between Moscow and Washington, is on a tanker heading to New York. This agreement was announced as part of efforts to reduce skyrocketing diesel prices ahead of the U.S. midterm elections on November 3.
The German National Oil Reserves Agency (EBV) announced a tender to sell quantities of diesel, heating oil, and crude oil from the country's strategic reserves. This is the first time Germany has released part of its strategic oil reserves, following an agreement among G7 countries earlier in October.
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