Oil prices reached near their highest level in six months on Friday. While a renewed military action by the United States against Iran is expected to overshadow hopes for a diplomatic agreement, concerns about potential disruptions in oil supply have resurfaced.
Increase in Crude Oil Prices
As of 05:45 Eastern Time (09:45 GMT), Brent crude futures rose by 2.1% to $117.19 per barrel. Additionally, West Texas Intermediate (WTI) crude oil prices increased by 1.8% to $103.88 per barrel.
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Brent futures reached $117.84 per barrel earlier in the day, marking their highest level since late April. Both types of oil are on track to record their fourth consecutive monthly increase of over 10%.
Military and Diplomatic Developments
According to reports, Admiral Brad Cooper, head of the U.S. Central Command, reviewed military options for Iran with President Donald Trump and Defense Secretary Pete Hegseth at the White House on Thursday. This meeting included discussions on the continuation of the U.S. blockade and the possibility of renewed military operations.
Trump indicated on Wednesday that new attacks could occur after the U.S. midterm elections on November 3, stating that "anything is possible." These developments have impacted hopes for a diplomatic resolution, while Washington is pursuing new contacts with Tehran to revive negotiations.
U.S. Vice President J.D. Vance has contacted Iranian security official Mohsen Rezaei to resume efforts to revive negotiations. However, Tehran has reacted to reports of rejecting a proposed agreement, creating uncertainty regarding future agreements.
The market is particularly sensitive to developments around the Strait of Hormuz, a vital transportation route for global oil supply. On Thursday, Saudi air defense intercepted another ballistic missile fired by the Houthi movement of Yemen towards the eastern province of the country. This incident followed the Houthis' claim of an attack on the Ras Tanura refinery earlier this week.
Ongoing threats to regional energy infrastructure have contributed to maintaining a geopolitical risk premium in oil prices. Additionally, supply data has also supported prices, as U.S. commercial crude oil inventories fell by 1.9 million barrels to 410.6 million barrels in the week ending October 23, contrary to expectations for a slight increase.
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