Oil prices settled more than $3 higher on Friday, their highest in nearly six months after Houthi attacks in Saudi Arabia stoked concerns over further disruption to energy supplies from the Middle East, where UAE authorities also reported an oil spill.
Brent crude futures settled at $116.72 a barrel, up $3.55 or 3.14%, their highest since April 29. US West Texas Intermediate crude closed at $103.27 a barrel, up $3.80 or 3.8%.
Brent finished the week up 6% and WTI ended 2.3% higher.
"Fears of supply disruptions drove the advance after Iranian-backed Houthi rebels carried out a series of attacks across Saudi Arabia, including on energy infrastructure," said Adam Turnquist, chief cross-asset strategist for LPL Financial.
On Thursday, Saudi Aramco ordered the evacuation of its headquarters in Dhahran on the Gulf near Bahrain, Reuters reported. Fighting intensified between Saudi Arabia, the world's largest crude exporter and Yemen-based Houthis.
An oil spill from a tanker was detected off the UAE coast of Umm Al Quwain, the United Arab Emirates Ministry of Climate Change and Environment said.
It did not say what caused the spill and authorities have not identified the tanker involved.
ATTACKS ON VESSELS
Shipping sources said on October 9 that the Gem No. 2 supertanker was struck by an unidentified projectile 13 nautical miles (24 km) west of Al Jazeera in the UAE.
"The market is concerned about these continued Iranian attacks on tankers that we've seen increase over the last week," said Andrew Lipow, president of Lipow Oil Associates. “While there has been an increase in oil transiting out of the Strait of Hormuz, that could change at any minute.”
Clashes between the Houthis and a Saudi-led coalition that backs Yemen's internationally recognised government have raged since the Iran-aligned Houthis pushed towards Bab el-Mandeb Strait last month, a shipping chokepoint at the mouth of the Red Sea.
October has been the worst month for attacks on commercial shipping in the Strait of Hormuz and nearby waterways, according to data compiled by a Washington-based think tank that has tracked maritime security incidents worldwide since 2017.
President Donald Trump said on Friday the US could end the war with Iran quickly, but said perhaps Washington should allow the conflict to gradually wind down.
STRATEGIC RESERVE RELEASES
The US Department of Energy said it had authorized an emergency exchange of up to 400,000 barrels of crude oil from the Strategic Petroleum Reserve to address a supply disruption affecting Phillips 66's Lake Charles refinery in Louisiana.
The SPR is already at the lowest level since 1982 after President Donald Trump tapped it as the US war on Iran disrupted supply lines. Trump's predecessor, President Joe Biden, also tapped the SPR following Russia's invasion of Ukraine.
Elsewhere, Germany's national oil stockpiling agency EBV circulated a tender to sell diesel, heating oil and crude oil volumes from strategic reserves.
This marks Germany's first oil releases from strategic reserves since G7 countries, under pressure from Trump, agreed to do so at the start of October.
On Thursday, the head of Libya's National Oil Corp told Reuters that an oil pipeline valve from the Hamada and Tahara oilfields to Zawiya port had been shut, leading to a reduction in production at both fields.
Ship tracking data showed the first Russian diesel bound for the US since Moscow and Washington reached an export agreement was aboard a tanker heading for New York.
Trump announced the deal this month as part of efforts to bring down soaring diesel prices ahead of US midterm elections on November 3.
US energy firms this week kept the total rig count unchanged for a second week in a row, energy services firm Baker Hughes said in its closely followed report on Friday. The total oil and gas rig count, an early indicator of future output, held steady at 603 during the week ended October 23.
Source: Reuters
– Agencies
