The price of West Texas Intermediate (WTI) crude oil reached $104.12 per barrel on Friday, marking an increase of 2.08 percent. This price increase occurred while Brent oil prices fell to $113.40 after temporarily nearing $118. These price fluctuations are attributed to the political and security conditions in the Middle East and existing tensions in international relations.
Impact of Political Tensions on Oil Prices
Traders are preparing for the possibility of escalating tensions as the U.S. midterm elections approach. An attack on a tanker in the Strait of Hormuz has once again highlighted the risk of disruptions to oil supply. The UK Maritime Trade Operations (UKMTO) reported that a tanker in this area was targeted by explosives. This marks the first successful attack using sticky mines in this waterway since the onset of the U.S. and Israel's war against Iran in February.
Read more: Frequent Disruptions in Syria's Oil and Gas Pipelines
Changes in Security Policies and Their Impact on the Oil Market
The U.S. Embassy in Riyadh has also issued an order for the departure of non-essential staff and their family members from Saudi Arabia due to security risks. Yemen's Ansar Allah has also announced that several locations in Saudi Arabia, including the large Ras Tanura refinery, the Rabigh refinery, and the Baqi production facilities owned by the state company Aramco, have been targeted for attack. These developments will significantly impact global oil prices.
According to a report by Denmark's Saxo Bank, due to the recent elections in Israel and the U.S. midterm elections, there is a likelihood of further oil price volatility in the next two weeks. The bank has predicted that even after the conflicts end, crude oil prices will trade in a higher range between $70 and $90 per barrel. Before the war, the price range for oil was between $60 and $70.
In another development, Libya's National Oil Corporation announced that an armed group has closed the main pipeline transporting crude oil from Hamada, resulting in a halt of approximately 15,000 barrels of oil per day. This situation reflects the interrelated impacts of security and oil supply on the global market.
Read more: Highest Tanker Orders in New Activities with High Prices Until 2027 · Increase in Oil and Gas Prices Leads to New Mergers in the North Sea of Britain
