LONDON / ConSynSer / – On Wednesday, October 21, Brent crude futures increased by $1.21, reaching $110 a barrel, according to Reuters, driven by ongoing Middle East conflicts that heightened market concern. Simultaneously, US West Texas Intermediate crude gained more than $1, climbing to $99 per barrel. Early in the trading session, new incidents involving tankers and Saudi energy installations pushed prices upward. However, these gains were later moderated by signs that Gulf export flows are rebounding. Currently, Brent is trading nearly 80% higher than it was a year ago.
Iran’s Revolutionary Guards announced that naval mines halted three tankers navigating routes not authorized by Tehran. A vessel was struck near Oman, according to the UK Maritime Trade Operations agency. Yemen’s Houthi movement claimed responsibility for attacks on Saudi Aramco facilities in Yanbu and the Shaybah oilfield. It also reported strikes on airports in Riyadh and Abha. These events have increased concerns over supply security passing through the Strait of Hormuz.
Throughout the day, trading remained volatile. At one point, Brent surrendered its gains and dipped below $108 a barrel. WTI briefly touched $100 but then eased below $98. Freight rates in the Persian Gulf stayed at record levels, exerting additional upward pressure. Over the past month, Brent has gained approximately 8%. Prices had rebounded after dropping to $100.34 in September. The benchmark remains significantly above the $100 level tested then.
Hormuz exports approaching pre-conflict levels
Secretary of State Marco Rubio indicated that shipments passing through the Strait of Hormuz are nearing prewar volumes. Data from tanker trackers Kpler and Vortexa show that Middle East crude exports have been rising since summer. Producers have increased shuttle shipments through Hormuz and conducted ship-to-ship transfers in the Gulf of Oman. Saudi Arabia’s crude exports increased by 7.9% in August, reaching their highest point since March. These flow increases helped limit Wednesday’s price rally.
Market participants also evaluated new US inventory data. Crude stockpiles decreased by a little over 3 million barrels last week, according to the Energy Information Administration. This was less than the 4.9 million-barrel draw reported earlier by the American Petroleum Institute. US weekly crude production declined to about 13.27 million barrels per day from 13.68 million a week prior. The data provided a mixed picture of US supply conditions.
Russian diesel shipment deal and recent drone strikes influence markets
Russia was expected to dispatch its first diesel cargo to the United States on Thursday, following an agreement between President Donald Trump and President Vladimir Putin. Last week, Trump suspended Graham Act penalties on Russia, removing tariffs that would have affected Russian fuel exports. Meanwhile, Ukraine has intensified drone attacks targeting Russian oil infrastructure. Trading Economics noted that these strikes aim to prevent Moscow from expanding its diesel exports.
On Thursday, October 22, oil prices extended their upward movement after a drone attack on Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent surpassed $111 a barrel, while WTI moved above $99. Additionally, Washington advised some personnel and their families to vacate US embassies in Saudi Arabia. Traders continue monitoring Gulf shipping activities, Saudi production levels, and Russian fuel exports for clues on future price movements.