Brent jumps 3.14% to $116.72 as Strait of Hormuz incidents escalate

Key Facts

Brent crude rose 3.14% to $116.72 a barrel in Friday's settlement, its highest level since April 29, while West Texas Intermediate climbed 3.8% to $103.27. The gains came amid rising risks to shipping in the Strait of Hormuz, after Tehran said 7 oil tankers caught fire or were damaged overnight. The Associated Press could not independently verify Iranian reports of attacks on the vessels. The developments link security tensions in the waterway with oil shipping, as vessels face mounting risks and higher costs to transit the area.

The Associated Press said the United States is sending additional military assets to the region, including a third aircraft carrier and thousands of troops. The deployment comes amid fears that attacks could resume, but does not substantiate the claim in the initial draft that the Navy is preparing for possible strikes on orders from President Donald Trump. Separately, the agency reported that the United States reduced staffing at 4 embassies in the Middle East because of increased Iranian threats. ABC News also quoted Israeli officials as saying that the U.S. and Israeli militaries had prepared plans to resume strikes on Iran in the coming weeks, and expected them to be carried out after the U.S. midterm elections. The White House spokesperson said the United States "will not attack Iran at any time before the midterm elections."

In the strait, Lloyd's List Intelligence said active Gulf operators appeared to have little inclination to withdraw, despite 28 attacks on vessels recorded during October, the highest number since the start of the war. The Associated Press said tankers continue to transit at night along a U.S.-protected route near Oman's coast, with positioning systems and mobile phones switched off. These measures reflect hazardous transit conditions, while shipping continues. The agency added that oil shipments through what it described as "dark shipping" had returned to levels close to those before the war, but at higher costs in time, money and risks to seafarers. This increases the importance of the waterway's security to oil flows and transport costs.

Brent stood at $116.72 a barrel after being below $97 at the start of October, according to the Associated Press, reaching its highest level since June 2022. In Friday's settlement, U.S. crude rose to $103.27 a barrel. These moves place the month's price gains in the broader context of shipping disruption, as vessel operators face additional risks and costs. The figures come amid a divergence between continued tanker transits and an increase in recorded attacks, making supply security and shipping costs key factors in monitoring the market.

On the diplomatic track, mediators are trying to bring Washington and Tehran back to formal talks, while both sides have acknowledged that indirect discussions are continuing, according to the Associated Press. The agency said Iran's proposal includes ending the war and reopening the strait within a week, if the United States meets several conditions, including ending its blockade of Iranian ports. President Donald Trump rejected Iran's latest proposal last month, the report said. The Federal Reserve will hold its Federal Open Market Committee meeting on October 27 and 28, including a press conference. The U.S. Energy Information Administration's weekly petroleum status report is scheduled for its usual release on Wednesday at 10:30 a.m. Eastern Time.