Global energy markets pushed oil prices to their highest level in more than six months on Friday. Brent crude, the international benchmark, gained about 3.5% to briefly surpass 117 dollars a barrel.
The increase followed threats from Tehran of retaliatory attacks across the Gulf region. Tehran stated it would target oil facilities, undersea cables, datacentres and artificial intelligence facilities if the United States and Israel launched a new offensive against Iran.
Richard Hunter, of the broker Interactive Investor, spoke about the market reaction. "Widespread reports that the US is considering renewed military strikes on Iran after the midterm elections rather than pursuing a diplomatic route was enough for the price to pop, after what many had considered would be a brief conflict is now in its eighth month," Hunter said.
Oil prices traded at approximately 72 dollars a barrel in February before the conflict began, later soaring to 126 dollars a barrel by the end of April.
Regional tensions escalated when Iran’s Islamic Revolutionary Guards Corps claimed responsibility for hitting four commercial ships in the strait of Hormuz on Wednesday. Meanwhile, the US state department ordered some diplomats and the families of government employees to leave Saudi Arabia. The kingdom has faced continuous attacks from Houthi rebels in Yemen.
Susannah Streeter, chief investment strategist at Wealth Club, said market anxiety is growing around potential strikes on Iranian energy infrastructure following the US elections on 3 November.
"At the same time, the attacks on Saudi Arabia’s facilities by Houthi rebels have intensified this week, and for ships attempting to cross the strait of Hormuz, it’s still a dangerous journey, with projectiles still being fired," Streeter said, adding that Ukrainian strikes on Russian diesel refineries are also contributing to supply pressures.
