LONDON / ConSynSer / – On Wednesday, October 21, Reuters reported that Brent crude futures gained $1.21, reaching $110 per barrel, as ongoing Middle East tensions kept oil markets volatile. Meanwhile, US West Texas Intermediate crude increased by over $1, closing at $99 a barrel. Early in the trading session, prices were pushed higher by new incidents involving tankers and attacks on Saudi energy infrastructure. However, these gains were later reduced as evidence emerged that Gulf export flows are recovering. Currently, Brent is trading nearly 80% higher than it was a year ago.
The Revolutionary Guards of Iran announced that naval mines prevented three tankers from passing through routes unauthorized by Tehran. A vessel was struck near Oman, according to the UK Maritime Trade Operations agency. Yemen’s Houthi movement claimed responsibility for attacks targeting Saudi Aramco facilities in Yanbu and the Shaybah oilfield, along with assaults on airports in Riyadh and Abha. These events heightened concerns over the security of shipments passing through the Strait of Hormuz.
Throughout the trading day, volatility persisted. Brent temporarily lost its gains and dipped below $108 per barrel, while WTI briefly hit $100 before retreating to below $98. Freight rates in the Persian Gulf remained at record highs, exerting upward pressure on prices. Over the past month, Brent has risen approximately 8%. The prices had rebounded after Brent slid to $100.34 in September. The benchmark remains significantly above the $100 level tested then.
Hormuz flows near prewar levels
According to Secretary of State Marco Rubio, shipments passing through the Strait of Hormuz are approaching prewar figures. Data from tanker trackers Kpler and Vortexa indicate that Middle East crude exports have been increasing since summer. Producers have intensified shuttle shipments through Hormuz and ship-to-ship transfers in the Gulf of Oman. In August, Saudi Arabia’s crude exports increased by 7.9%, reaching their highest point since March. These increased flows contributed to capping Wednesday’s rally.
Traders also analyzed new US inventory data, which showed crude stocks decreasing by just over 3 million barrels last week, according to the Energy Information Administration. This decline was less than the 4.9 million barrels reported earlier by the American Petroleum Institute. US crude output weekly fell to about 13.27 million barrels per day from 13.68 million a week earlier, presenting mixed signals regarding US supply levels.
Russian diesel deal and recent drone strikes
Russia was anticipated to send its first diesel shipment to the United States on Thursday, following a deal between President Donald Trump and Russian President Vladimir Putin. Trump suspended Graham Act penalties on Russia last week, removing tariffs that would have impacted Russian fuel exports. Meanwhile, Ukraine has increased drone attacks targeting Russian oil infrastructure. Trading Economics highlighted that these strikes suggest Kyiv’s intent to prevent Moscow from expanding its diesel exports.
On Thursday, October 22, oil prices extended their upward trend after a drone strike on Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent surpassed $111 per barrel, while WTI moved above $99. In response, Washington advised some personnel and their families to evacuate US embassies in Saudi Arabia. Market participants continue monitoring Gulf shipping activity, Saudi production levels, and Russian fuel exports to gauge the next potential price movements.