Oil Hits Six-Month High

Global energy markets reached their highest levels in six months on Friday as traders priced in a new phase of the Middle East conflict. Brent crude, the international benchmark for oil, surged 3.5 percent during the session. The price briefly exceeded $117 per barrel before settling at just over $116, a gain of more than 2.7 percent from the previous close.

Iranian officials stated that Tehran would target oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf if the United States and Israel launch a joint offensive. This specific inclusion of digital infrastructure marked a shift in the stated scope of potential retaliation. The announcement followed reports that the United States is considering military strikes timed for after the November 3 midterm elections.

Richard Hunter, a broker at Interactive Investor, attributed the price spike to the shift away from diplomatic solutions. He noted that the conflict, initially expected to be brief, is now entering its eighth month. The escalation follows a period where prices had stabilized, but renewed threats have pushed costs higher for global consumers.

Physical attacks in the region intensified earlier in the week. The Islamic Revolutionary Guards Corps claimed strikes on four commercial ships in the Strait of Hormuz on Wednesday. The strait serves as a critical chokepoint for global oil shipments, and recent incidents have increased the risk for commercial vessels attempting to navigate the area.

In response to the instability, the US State Department ordered some diplomats and their families to leave Saudi Arabia. The kingdom faces continued attacks from Yemen-based Houthi rebels, adding another layer of complexity to regional security. Susannah Streeter, chief investment strategist at Wealth Club, said fears are mounting that US and Israeli forces may target Iran’s energy infrastructure after the elections.

Streeter pointed out that Houthi attacks on Saudi facilities have intensified this week. She added that the journey across the Strait of Hormuz remains dangerous due to projectiles being fired at maritime traffic. Beyond the Middle East, Ukraine’s bombardment of Russian diesel refineries is also impacting global supply chains, further complicating the market environment.

Brent crude was trading at approximately $72 per barrel in February before the war with Iran began. By the end of April, tensions had driven the price to touch $126 per barrel. The current levels represent a sustained period of elevated costs compared to pre-conflict baselines.