Oil prices headed for weekly gains on Friday as escalating tensions in the Middle East and a sharp decline in US crude inventories heightened concerns over global supplies, while emergency stock releases and prospects for increased Russian fuel supplies limited gains.
International benchmark Brent crude futures for December delivery traded at $105.73 per barrel at 4.15 p.m. local time (1315 GMT) Friday, up 1% from last Friday’s close of $104.72.
US benchmark West Texas Intermediate (WTI) crude futures for November delivery traded at $97.65 per barrel, up around 6.3% from $91.85 a week earlier.
Escalating clashes between Yemen’s Iran-backed Houthis and Saudi Arabia raised concerns over oil production and shipments in the Middle East, lending support to prices during the week.
Saudi authorities reported intercepting several missiles and drones launched by the Houthis, while debris from intercepted cruise missiles injured four people and damaged homes in Riyadh.
Saudi Arabia’s Energy Ministry also said an administrative building belonging to Saudi Aramco in the eastern city of Dhahran had been targeted, causing a small fire but no casualties.
Meanwhile, security risks in the Strait of Hormuz continued to fuel concerns over supply disruptions.
The UK Maritime Trade Operations (UKMTO) reported that two vessels were struck by unidentified projectiles in separate incidents in the strait on Wednesday.
The Islamic Revolutionary Guard Corps (IRGC) Navy also said a container vessel sank after striking a naval mine while attempting to cross the waterway along what it described as an unauthorized route.
The incidents underscored persistent risks to commercial shipping through the strategic waterway amid the ongoing US-Iran conflict, adding to concerns over potential disruptions to oil flows.
Fresh US sanctions targeting financial networks used to transfer Iranian oil revenues added to the pressure on Tehran’s energy trade.
The US Treasury Department blacklisted 16 individuals and 10 entities, raising concerns that restrictions on Iran’s access to the international financial system could complicate its oil exports.
– US crude inventory draw supports prices
A larger-than-expected decline in US crude inventories provided further support for oil prices.
Data released Thursday by the US Energy Information Administration (EIA) showed that commercial crude inventories fell by approximately 8.6 million barrels in the week ended Oct. 9.
US crude production also declined by 300,000 barrels per day (bpd) to around 13.68 million bpd, while imports fell by 791,000 bpd to 6.05 million bpd.
Attacks on energy infrastructure in the Russia-Ukraine war added to concerns over potential disruptions to global oil and petroleum product supplies.
Ukrainian President Volodymyr Zelenskyy accused Russia of continuing attacks on Ukrainian energy facilities despite a US-announced energy ceasefire. He later said Kyiv would resume strikes on Russian oil refineries.
– IEA accelerates emergency stock releases, limiting price gains
However, gains were limited by expectations of increased global oil and fuel supplies following a decision to accelerate emergency stock releases and steps to ease certain restrictions on Russian petroleum products.
The International Energy Agency (IEA) said Thursday that member countries had agreed to accelerate the release of approximately 100 million barrels of emergency oil stocks remaining under a collective action launched in March in response to the Strait of Hormuz crisis.
The remaining volumes include more than 20 million barrels of diesel, which the agency said would be released as soon as possible.
The IEA said approximately 330 million barrels had already been released and urged countries with oil production and refining capacity to increase supplies, particularly diesel.
– US easing of Russian diesel restrictions raises supply expectations
A US decision to temporarily ease restrictions on Russian diesel trade also raised expectations of additional fuel supplies reaching global markets.
The US Treasury Department authorized transactions involving the sale, delivery, offloading and import of Russian diesel through April 7, 2027.
Russian Deputy Prime Minister Alexander Novak said Russia could increase diesel exports to 3.5 million metric tons per month by year-end, potentially easing tightness in global fuel markets.
Reports that Washington was considering easing sanctions on vessels linked to the so-called shadow fleet also weighed on prices by raising expectations of lower shipping costs and greater tanker availability, although no final decision had been announced.