Brent settles at $117.64 a barrel, highest close since late April
Key Facts
Brent futures for December delivery settled at $117.64 a barrel on Friday, October 30, up 2.4% after touching $118, their highest settlement since late April, according to Reuters. The December contract expired that day, while the more actively traded January contract rose $2.63 to $113.43 a barrel. West Texas Intermediate crude rose 2.1% to $104.12 a barrel in the same session, according to Investing.com. The gains followed an attack on a tanker in the Strait of Hormuz, as traders monitored supply risks and the possibility of an escalation in the war. Reuters said traders were bracing for the possibility of an escalation after the U.S. midterm elections.
Oil's gains extended across the month, with Brent rising 13.6% in October and West Texas Intermediate crude gaining 15.2%, according to Investing.com. Those monthly gains reflect a broader move than Friday's session, when both benchmarks posted daily increases. Brent's December contract reached an intraday high of $118 before settling at $117.64. The January contract, the most actively traded, closed at $113.43 a barrel. Reuters highlighted that the tanker attack underscored supply risks, without attributing responsibility for the attack to any party.
Maritime security sources told Reuters that a small boat attached two limpet mines to the hull of a tanker in the Strait of Hormuz, causing a fire in the engine room and temporarily disabling it. UKMTO said the tanker’s crew was safe and there was no environmental pollution. The organization placed the incident 25 nautical miles, or 46 kilometers, northeast of Oman's Khasab, and Reuters said the tanker continued to its destination port after the fire was extinguished. The agency described the incident as the first known successful use of limpet mines in the region since the U.S.-Israeli war with Iran began in February. It added that a separate attempt in September failed to detonate.
In another incident, Oman said it had evacuated 25 crew members from a Panama-flagged tanker attacked in the Strait of Hormuz, 1.6 nautical miles off the coast of Musandam Governorate, according to the Associated Press. It was unclear whether the incident was connected to the tanker fires described by the Iranian side. Iran's Revolutionary Guards said four tankers caught fire after incidents in or near the strait. It added that some tankers had been hit by naval mines after taking unauthorized routes. These claims could not be independently verified, while the incidents attributed to different sources point to multiple events in the region.
A count of UKMTO reports showed at least 35 attacks on ships in the Gulf and the Strait of Hormuz during October, the highest monthly number since the conflict began in February, according to Investing.com. In the week ending October 28, the organization recorded 122 outbound transits and 155 inbound transits. Total transit traffic remained about 70% below prewar levels. The figures show continued ship traffic through the strait alongside a sharp decline from its previous level, as reports of attacks recur. By contrast, Saudi crude exports rose in October compared with September, according to two of the three ship-tracking companies cited by Reuters, despite attacks on shipping and claims of strikes on Saudi oil facilities.
Alongside the risks to navigation, Qatari mediators returned to Tehran on Friday, according to Investing.com, while Iranian sources said a meeting could take place within a week in Doha or Istanbul. The timing remained tentative, according to those sources, and the available information included no details about the meeting's agenda. Reuters said traders were watching for the possibility of an escalation in the war after the U.S. midterm elections. It also said oil prices could become more volatile over the following two weeks because of the Israeli elections and the U.S. elections scheduled for November 3. This ties the coming period to developments on the diplomatic track and near-term election dates, as concerns over shipping through Hormuz continue.