LONDON / ConSynSer / – On Wednesday, October 21, oil prices advanced with Brent crude futures increasing by $1.21 to reach $110 per barrel, according to Reuters. Simultaneously, US West Texas Intermediate crude also saw gains of more than $1, pushing the price to $99 per barrel. This upward movement occurred amid a highly volatile trading session prompted by renewed attacks on maritime and energy infrastructure within the Middle East. Market participants balanced those geopolitical risks against emerging indications that crude shipments from the Gulf are gradually recovering. Notably, Brent has now appreciated nearly 80% compared to the same period last year.
Iran’s Revolutionary Guards claimed that naval mines had obstructed three tankers traveling through routes Iran deems unauthorized, with the UK Maritime Trade Operations agency reporting an incident near Oman involving a vessel struck by such mines. Yemen’s Houthis also asserted responsibility for attacks targeting Saudi Aramco facilities in Yanbu and at the Shaybah oilfield, along with assaults on airports in Riyadh and Abha. These events rekindled fears over the stability of supply routes passing through the Strait of Hormuz.
Throughout the day, price swings were pronounced; Brent’s earlier gains eased, and at one point, it dipped below $108. Meanwhile, WTI briefly surged to $100 before fluctuating just under $98. Elevated freight rates in the Persian Gulf continued to support the overall price trend. Over the past month, Brent has increased roughly 8%, according to data from Trading Economics. Additionally, oil prices saw a recovery in late September after a four-session decline, as detailed here.
Middle Eastern export flows help counter supply concerns
US Secretary of State Marco Rubio indicated that shipments passing through the Strait of Hormuz are nearing prewar levels, with tanker tracking data from Kpler and Vortexa showing increased crude exports from the Middle East since summer, as producers ramp up shuttle shipments through Hormuz and engage in ship-to-ship transfers in the Gulf of Oman. Notably, Saudi crude exports increased by 7.9% in August, reaching their highest level since March. The resurgence in export flows played a significant role in capping gains during Wednesday’s trading session.
US inventory figures also played a role in market movements; the Energy Information Administration reported a decrease of just over 3 million barrels in US crude stocks last week, while the American Petroleum Institute noted a larger decline of 4.9 million barrels. US weekly crude production declined to approximately 13.27 million barrels per day from 13.68 million the previous week. These lower inventories suggest a tightening of supply within the world’s largest oil-consuming nation.
Focus shifts to Russian diesel exports and Saudi attacks
A first shipment of Russian diesel was scheduled for delivery to the United States on Thursday, following an agreement between President Donald Trump and President Vladimir Putin, made possible after Trump waived Russia sanctions under the Graham Act last week. Meanwhile, Ukraine has launched extensive drone strikes targeting Russian oil infrastructure, signaling Kyiv’s efforts to prevent Moscow from expanding its diesel exports, according to Trading Economics.
On October 22, prices increased once again after a drone attack on Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent surpassed $111 per barrel, and WTI moved above $99. Additionally, the United States issued orders for some personnel and their families to evacuate its embassies in Saudi Arabia. Traders remain vigilant, closely monitoring Gulf shipping activities, Saudi oil output, and Russian fuel flows as they assess the next move in oil prices.