LONDON / ConSynSer / – On Wednesday, October 21, Brent crude futures increased by $1.21 to reach $110 a barrel, according to Reuters, as ongoing conflicts in the Middle East kept the oil markets on high alert. Meanwhile, US West Texas Intermediate crude rose by over $1 to $99 per barrel. Early trading saw prices climb due to recent incidents involving tankers and attacks on Saudi energy facilities, though later gains were moderated by indications that Gulf export flows are gradually returning to normal. Currently, Brent is trading approximately 80% higher than it was this time last year.
The Revolutionary Guards of Iran reported that naval mines had halted three tankers traveling through routes not authorized by Tehran. Additionally, a vessel was damaged near Oman, as confirmed by the UK Maritime Trade Operations agency. Yemen’s Houthi movement claimed responsibility for attacking Saudi Aramco sites in Yanbu and the Shaybah oilfield, along with targeting airports in Riyadh and Abha. These events have intensified concerns over the security of supply routes passing through the Strait of Hormuz.
Throughout the trading day, volatility persisted. At one point, Brent relinquished its earlier gains and dipped below $108 a barrel. WTI briefly surged to $100 but then eased to below $98. Freight rates in the Persian Gulf remained at record-high levels, exerting additional upward pressure on prices. Over the past month, Brent has increased roughly 8%. It had previously rebounded after falling to $100.34 in September. Today’s prices stay well above that level, maintaining a significant premium.
Hormuz trade approaching prewar volumes
Secretary of State Marco Rubio indicated that shipments passing through the Strait of Hormuz are nearing levels seen before the outbreak of recent conflicts. Data from tanker tracking services Kpler and Vortexa have shown an increase in crude exports from the Middle East since summer. Producers have ramped up shuttle shipments through Hormuz and ship-to-ship transfers in the Gulf of Oman. Saudi Arabia’s crude exports saw a 7.9% rise in August, reaching their highest point since March. These increased flows have contributed to limiting the gains witnessed on Wednesday.
Market participants also analyzed new US inventory data. According to the Energy Information Administration, crude inventories declined by just over 3 million barrels last week, which was less than the 4.9 million barrel draw reported earlier by the American Petroleum Institute. Meanwhile, weekly US crude output decreased to approximately 13.27 million barrels per day from 13.68 million barrels a week earlier, offering a mixed outlook on US oil supply levels.
Russia’s diesel export deal and recent drone attacks
Russia is anticipated to dispatch its first diesel shipment to the United States on Thursday, following a deal between President Donald Trump and Russian President Vladimir Putin. Last week, Trump suspended Graham Act penalties, removing tariffs that would have impacted Russian fuel products. Meanwhile, Ukraine has intensified drone strikes targeting Russian oil infrastructure, with Trading Economics noting that these attacks aim to prevent Moscow from expanding its diesel exports.
On Thursday, October 22, oil prices continued to gain after a drone strike at Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent surpassed $111 a barrel, while WTI rose above $99. Additionally, the US advised some personnel and their families to evacuate US embassies in Saudi Arabia. Investors remain attentive to Gulf shipping activities, Saudi oil supply, and Russian fuel export figures as they seek clues on future price movements.