Oil jumps 2%, settles at 6-month highs on fears of escalation in Iran
A motorist puts gas in the tank of a vehicle at a Costco gasoline station Thursday in Lone Tree, Colo. AP-Yonhap
Oil prices jumped more than 2 percent on Friday and settled at their highest levels since the end of April, as traders braced for a potential escalation in the Iran war after the U.S. midterm elections, with an attack on a tanker in the Strait of Hormuz highlighting supply risks.
Brent crude futures for December, which expired on Friday, settled up $2.76, or 2.4 percent, at $117.64 a barrel, after touching a high of $118. The more active January contract gained $2.63 to $113.43.
U.S. West Texas Intermediate (WTI) crude futures settled $2.12, or 2.08 percent, higher at $104.12.
For the month, Brent finished 13.6 percent higher, while WTI rose 15.2 percent.
"Traders will remain focused on oil flows out of the Middle East and the likely escalation by U.S. and allied forces," said Dennis Kissler, senior vice president of trading at BOK Financial.
On Friday, a tanker in the Strait of Hormuz was hit by explosive devices attached by a small boat, said the UKMTO, the British maritime security service. It was not immediately clear who was behind the attack in the strait, the key sea outlet for Gulf crude and fuel supplies.
It was the first known successful strike in the waterway using limpet mines, explosives that are attached to a ship's hull from a small boat, since the US-Israeli war with Iran began in February, maritime sources said.
'Higher likelihood of an escalation'
The U.S. ordered non-emergency government employees and their family members to leave Saudi Arabia effective October 23 due to safety risks, the U.S. embassy in Riyadh said on Friday, citing Houthi attacks on civilian airports and other critical infrastructure.
Yemen's Iranian-backed Houthi militants said on Thursday they had attacked several sites in Saudi Arabia, including the large Ras Tanura oil refinery, the Rabigh refinery and a production facility in Abqaiq owned by state oil company Saudi Aramco.
A Saudi-led coalition also said it had intercepted a cruise missile launched by the Houthis towards the kingdom's western region.
Meanwhile, Qatari mediators returned to Tehran on Friday as part of coordinated efforts to reach a deal between the U.S. and Iran, an official briefed on the talks told Reuters.
U.S. President Donald Trump said on Thursday that Vice President JD Vance had reached out to Iran to help the country get medical supplies, after U.S. 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, Iran's semi-official Tasnim news agency reported, adding that Tehran wants the U.S. to meet its conditions and "any position that contradicts this framework is unacceptable."
Oil prices could become even more volatile in the next couple of weeks due to Israel's recent elections and the U.S. midterm elections on November 3, according to a Saxo Bank briefing on Thursday.
The Danish bank said crude is expected to trade in a higher range of $70 to $90 a barrel even after the conflict ends, compared with a pre-war range of $60 to $70.
Saudi exports rise
Saudi Arabia's crude exports rose in October from September, two of three ship-tracking companies said, despite Iranian attacks on shipping in the Gulf and claims by Yemen's Iran-aligned Houthis of attacks on Saudi oil facilities.
The U.S. oil rig count, an indicator of future output, rose by two. U.S. crude oil output increased in August, while demand for crude oil and petroleum products declined, the U.S. Energy Information Administration (EIA) said in its Petroleum Supply Monthly report on Friday.
Meanwhile, Libya's National Oil Corporation said an armed group shut a valve on Friday on the main Hamada crude oil pipeline, which links the Hamada field to the Zawiya refinery. It said the closure of the valve had halted the flow of about 15,000 barrels per day.