NEW YORK, United States / RankWire.AI / – Oil futures surged on Friday, with Brent crude reaching $110 a barrel for the first time since May. Concerns over escalating Middle East conflicts fueling fears of tighter supply fueled the rally. Brent for December settlement rose by $3.94, or 3.7%, to $109.86, marking its highest close since May 19. Meanwhile, West Texas Intermediate (WTI) gained $3.44, or 3.5%, closing at $101.41, its top level since September 17. Market participants also evaluated Russia’s ability to supply diesel.
Both benchmarks recorded significant weekly gains, with WTI climbing 10.4% and Brent increasing 4.9%, marking a second consecutive weekly rise. Brent remained relatively stable on Thursday, while WTI jumped over 3%, narrowing the spread as WTI outperformed Brent. Bloomberg noted that Friday’s price swing was the first sizable move in an otherwise range-bound week. Earlier in October, Brent had surged above $103 before the recent uptick.
The primary concern for traders continues to be security threats in the Strait of Hormuz, where attacks have surged over the past 10 days. Iran announced it was intensifying strikes in response to a U.S. blockade of its ports and increased sanctions last month. According to Kpler analysts, these attacks have sharply reduced crude flows from the Gulf. Additionally, a Saudi-led coalition intercepted a ballistic missile aimed at Yanbu in the Red Sea, with initial reports indicating no damage, as per Rapidan Energy Group.
Fuel markets boosted by diesel supply concerns and refinery disruptions
Fears over fuel supply extended to refined products. Ukraine targeted a Russian refinery on Thursday after President Volodymyr Zelenskiy declared Ukraine would abandon a ceasefire on energy sites, which was previously announced by U.S. President Donald Trump. Industry sources told Reuters that the Ryazan refinery halted a primary crude distillation unit following a drone attack. Dennis Kissler from BOK Financial questioned Russia’s diesel delivery capacity, noting that Middle East risks and Russian supply doubts kept traders active.
Diesel futures settled at $4.90 a gallon in New York, according to Bloomberg. European diesel futures have more than doubled this year. Refineries elsewhere increased processing to compensate for Russian supply shortfalls. Although Trump stated Moscow would honor a deal to release Russian diesel globally, a bill introduced by U.S. lawmakers on Friday aims to block that arrangement. The outage at Ryazan adds uncertainty over whether the fuel will reach markets soon.
International efforts and U.S. reserves help stabilize supply concerns
Emergency stockpiles are being utilized to alleviate shortages. The International Energy Agency agreed on Thursday to release over 20 million barrels of fuel, followed by a request from the U.S. Department of Energy on Friday for proposals to exchange up to 17 million barrels from the Strategic Petroleum Reserve. The U.S. has already committed to a loan of 172 million barrels under a broader plan involving about 30 IEA members to release 400 million barrels.
Analysts anticipate that geopolitical risks will continue to support prices. Energy Aspects noted that Brent and WTI reversed earlier losses on Friday, with ongoing escalation risks maintaining market support. Rebecca Babin from CIBC Private Wealth Group highlighted that traders are factoring risk back into prices, especially before the weekend. A significant U.S. crude inventory draw, linked to hurricane-related shutdowns, also contributed to the upward trend. Brent closed just below $110 for the week.