The rally reflects growing uncertainty over the availability of oil and petroleum products as conflicts in the Middle East and Russia continue to disrupt global energy markets.
Russian diesel supply uncertainty adds to pressure
US lawmakers introduced a bill on Friday to block President Donald Trump's proposed deal with Moscow to release several hundred million barrels of diesel. The move reflects opposition to measures that could provide Russia with additional revenue to support its war effort.
Trump has reiterated that Moscow would proceed with a diesel release. However, continued hostilities around the Black Sea have raised doubts over whether the arrangement will materialise.
A recent strike on Russia's Ryazan oil refinery, which led to a suspension of operations, has added to concerns about the reliability of energy supplies, Reuters reported.
If Russian diesel remains excluded from global markets, refineries elsewhere may need to increase processing to meet demand. This could intensify competition for crude oil and refined products, further tightening physical markets.
Oil prices climb as conflicts disrupt supplies
Crude prices have risen more than 70% this year as conflicts in the West Asia and Russia disrupt energy supplies. Refined products have recorded even sharper gains, with European diesel futures more than doubling over the period.
Brent's rise to $110 a barrel underscores concerns that supply relief may not arrive soon enough to ease pressure on global energy markets.
Analysts are closely monitoring developments in the Persian Gulf for signs of further escalation. US President Donald Trump has declined to rule out using a weapon known as the “Mother of all Bombs” against Iran after the November 3 election, according to an interview with Newsmax.
CNN has also reported that the US has developed strike plans that could include the GBU-43/B Massive Ordnance Air Blast Bomb, a large-yield weapon.
“The conflict is likely to escalate,” Eurasia Group analysts wrote in a note, raising their estimate of the odds of intensification to 65% from 35%. “The standoff status quo is no longer sustainable for the US.”
With geopolitical risks mounting and prospects for additional supplies uncertain, traders are bracing for further volatility in oil prices.