Brent crude settles near $116 after Iran targets Gulf infrastructure

Global energy markets reached their highest volatility in six months on Friday as geopolitical risks in the Middle East drove crude oil costs to new levels. Brent crude, the international benchmark for pricing, surged 3.5 percent during the session. The price briefly topped $117 per barrel before settling at just over $116. This final figure was more than 2.7 percent higher than the previous close.

The price spike followed specific threats from Iranian officials regarding potential retaliation. Tehran stated that a new joint US-Israeli offensive would trigger strikes against oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf region. Traders responded to these statements by buying hedging positions, reflecting growing concern over a fresh wave of conflict.

Market analysts attributed the volatility to reports that the United States is planning renewed military strikes on Iran. These operations appear to be scheduled for after the US midterm elections on November 3. Richard Hunter, a broker at Interactive Investor, noted that this shift from a diplomatic approach caused the immediate price spike. He observed that the conflict, initially viewed as brief, is now entering its eighth month.

The escalation contrasts with earlier price points during the war. In February, before hostilities began, Brent crude traded at approximately $72 per barrel. By the end of April, tensions had pushed the price to $126 per barrel. Current levels indicate that elevated costs for consumers and businesses remain a persistent feature of the global economy.

Physical threats in the region intensified this week, adding to market anxiety. The Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz on Wednesday. This strait serves as a critical chokepoint for global oil shipments. Recent incidents have made navigation through the area increasingly risky for commercial vessels transporting energy resources.

The US State Department issued orders for some diplomats and the families of US government employees to leave Saudi Arabia in response to rising instability. The kingdom has faced continued attacks from Houthi rebels based in Yemen. Susannah Streeter, chief investment strategist at Wealth Club, pointed out that these Houthi attacks have intensified this week. She warned that the journey for ships crossing the Strait of Hormuz remains dangerous due to projectiles fired at maritime traffic.

Supply concerns extend beyond the Middle East to other global conflicts. Streeter noted that Ukraine’s bombardment of Russian diesel refineries is also impacting the energy market. This additional pressure on supply chains complicates an already volatile environment for global buyers and sellers.