Key Point
- Brent rises towards $100 a barrel, and US WTI approaches $92, extending a two-day recovery
- Both international benchmarks remain on course for weekly losses of around 12 per cent following Wednesday’s sharp sell-off
- Gulf physical-market assessments show substantial declines in crude oil, petrol and diesel prices
ISLAMABAD: International oil prices continued to rise on Friday, recovering part of their steep losses earlier in the week as fresh attacks on commercial ships in the Gulf revived concerns about the security of Middle Eastern oil supplies.
Brent crude, the international benchmark, was quoted at $99.73 a barrel in the latest available OilPrice.com market update, gaining $1.44, or 1.47 per cent.
US West Texas Intermediate (WTI), the benchmark for American oil, rose $1.05, or 1.16 per cent, to $91.57 a barrel.
Brent had also crossed the $100 threshold during Friday’s trading, reaching $100.25, while WTI touched $92.22 in an earlier market update.
The two benchmarks recovered for a second consecutive session but remained on course for weekly declines of almost 12 per cent.
Sharp weekly decline
The latest recovery follows a major sell-off on Wednesday, when Brent fell $8.98, or 8.7 per cent, to settle at $94.62 a barrel, while WTI dropped $7.97, or 8.3 per cent, to $88.12.
Both benchmarks recorded their lowest settlement levels since August 31.
The decline followed the US midterm elections, in which Democrats gained control of both chambers of Congress.
Investors interpreted the outcome as increasing political pressure on President Donald Trump for an end to the US-Israeli war with Iran, raising expectations that restrictions on regional oil shipments could eventually ease.
However, the prospect of a diplomatic breakthrough has yet to translate into the restoration of normal commercial shipping through the Gulf.
Brent had climbed to $98.01 during Thursday’s trading, gaining $3.39, or 3.58 per cent, while WTI advanced $2.21, or 2.51 per cent, to $90.33. Both benchmarks continued rising later in the session.
Tanker attacks revive supply concerns
The recovery gained momentum after fresh incidents involving commercial vessels in the Gulf and the Strait of Hormuz raised concerns about possible interruptions to oil shipments.
READ ALSO: Pakistan Slashes Petrol Price by Rs9.41, Diesel by Rs5.56
Iran reported three additional tanker attacks on Thursday. The United Kingdom Maritime Trade Operations (UKMTO), the maritime security agency on commercial shipping incidents monitoring, also reported a tanker being struck by two unidentified projectiles north of Qatar on November 5.
The incidents followed attacks reported off Oman and within the Strait of Hormuz earlier in the week.
Any prolonged interruption can restrict supplies to international markets, particularly in Asia, which depends heavily on Gulf energy imports.
The continuing security risks have made traders cautious about assuming that expectations of an end to the conflict will immediately restore normal oil deliveries.
Gulf crude and fuel prices fall sharply
Physical-market assessments published through Pakistan’s Oil and Gas Regulatory Authority (OGRA), using S&P Global Platts data, show that Gulf crude and refined-product prices have also declined substantially.
The latest available assessments, dated November 5, recorded the following prices:
| Commodity | Price per barrel | Daily change |
|---|---|---|
| Dubai crude | $92.85 | -$8.04 (-7.97%) |
| Arab Gulf petrol (92 RON) | $87.89 | -$7.91 (-8.26%) |
| Arab Gulf diesel (10 ppm) | $136.78 | -$10.31 (-7.01%) |
Compared with November 2, Dubai crude has fallen 11.82 per cent, petrol 15.53 per cent and diesel 7.48 per cent.
These are physical-market assessments used to price actual oil and fuel supplies, rather than financial-market futures quotations.
They also matter to Pakistan, and the local petroleum product prices are linked to international refined oil product rates.
Market outlook
Oil markets remain caught between expectations of improved supplies if the Iran conflict moves towards a diplomatic settlement and the immediate risks posed by attacks on commercial shipping.
However, the latest rebound demonstrates that the security of Gulf shipping remains a major factor in determining international energy costs.
Until commercial vessels can move through the region with greater certainty, oil prices are likely to remain vulnerable to further sharp movements.
