Key Points
- Brent crude rises 5.32 per cent during the week to $117.64 a barrel
- US West Texas Intermediate (WTI) gains 0.82 per cent to close at $104.12
- Uncertainty over US-Iran diplomacy supports prices
ISLAMABAD: International oil prices ended the week higher, with Brent crude gaining more than 5 per cent as renewed security threats in the Middle East and a tanker attack in the Strait of Hormuz fueled prices.
The deepening uncertainty over diplomatic efforts between the United States and Iran heightened concerns about global energy supplies.
Brent crude futures for December delivery settled at $117.64 a barrel on Friday, October 30, gaining $2.76, or 2.4 per cent, during the session.
Compared with the previous Friday’s settlement of $111.70, the benchmark advanced $5.94, or 5.32 per cent, during the week.
US West Texas Intermediate (WTI) crude futures rose $2.12, or 2.08 per cent, on Friday to settle at $104.12 a barrel. The US benchmark gained $0.85, or 0.82 per cent, from its October 23 settlement of $103.27.
The two benchmarks recorded different weekly performances, with Brent receiving stronger support from concerns over Middle Eastern supplies and the security of international shipping routes.
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Both benchmarks also posted substantial gains in October, with Brent advancing 13.6 per cent and WTI 15.2 per cent, reflecting the growing geopolitical risk premium in international oil markets.
Hormuz attack raises supply concerns
The principal development supporting prices towards the end of the week was an attack on a tanker travelling through the Strait of Hormuz.
The vessel was struck by explosive devices attached to its hull by a small boat, raising fresh concerns about the safety of commercial shipping through the strategic waterway.
The strait is one of the world’s most important energy corridors, carrying substantial volumes of crude oil and petroleum products from Gulf producers to international markets, particularly Asia.
Any prolonged disruption could restrict supplies and increase transportation costs, insurance premiums and delivery risks for oil-importing countries.
Houthi threats add to market anxiety
Concerns were further heightened by claims from Yemen’s Houthi militia of attacks on energy facilities.
The claims added to fears that the conflict could extend beyond shipping routes to energy production and refining infrastructure.
However, the reported attacks should be distinguished from independently confirmed damage or production losses.
Developments in the region therefore continued to sustain the security premium in oil prices, even as traders monitored actual supply and export volumes.
Diplomacy offers limited relief
Diplomatic efforts between Washington and Tehran remained another important influence on market sentiment.
After the Makkah-accord-countries met with Iranian leadership earlier last week, Qatari mediators returned to Tehran to pursue a possible understanding.
Iran confirmed receiving a letter from US Vice President JD Vance but had not yet responded.
The prospect of diplomatic progress could ease concerns about supply disruptions and put downward pressure on prices. However, the absence of a breakthrough has kept traders cautious.
With Brent closing October above $117 and WTI above $104 a barrel, oil markets enter November facing persistent geopolitical risks, vulnerable shipping routes and uncertainty over the prospects for ending the conflict.
