LONDON / ConSynSer / – On Wednesday, October 21, Brent crude futures increased by $1.21 to reach $110 per barrel, according to Reuters, driven by ongoing Middle East conflicts that kept the oil markets volatile. Meanwhile, US West Texas Intermediate crude edged up more than $1, hitting $99 a barrel. Early session gains were fueled by fresh reports of tanker incidents and attacks on Saudi energy facilities, but later gains were curbed as evidence emerged that Gulf export flows are gradually returning to normal. Over the past year, Brent has surged nearly 80% higher.
Iran’s Revolutionary Guards announced that naval mines prevented three tankers from using routes that Tehran had not authorized. A vessel was struck near Oman, according to the UK Maritime Trade Operations agency. Yemen’s Houthi movement claimed responsibility for attacks on Saudi Aramco sites in Yanbu and the Shaybah oilfield, as well as on airports in Riyadh and Abha. These events intensified concerns regarding the safety of supplies transiting the Strait of Hormuz.
Throughout the trading day, market fluctuations persisted, with Brent losing its early gains and dipping below $108 a barrel at one point. WTI briefly climbed to $100 before retreating to below $98. Freight rates in the Persian Gulf remained at record levels, exerting additional upward pressure on prices. Over the past month, Brent has increased approximately 8%. Prices had rebounded after Brent fell to $100.34 in September, and the benchmark remains well above that level.
Hormuz shipments approach prewar volumes
Secretary of State Marco Rubio stated that shipments passing through the Strait of Hormuz are nearing levels seen before the outbreak of war. According to tanker tracking data from Kpler and Vortexa, Middle East crude exports have been on the rise since the summer months. Producers have increased shuttle shipments through Hormuz and conducted ship-to-ship transfers in the Gulf of Oman. Saudi Arabia’s crude exports climbed by 7.9% in August, reaching their highest point since March. These increased flows contributed to limiting Wednesday’s rally in prices.
Market participants also examined the latest US inventory data, which showed crude stocks declining by just over 3 million barrels last week, a smaller decrease than the 4.9 million barrels reported earlier by the American Petroleum Institute. US crude production decreased to approximately 13.27 million barrels per day from 13.68 million the previous week. This data presents a mixed outlook for US supply levels.
Russia’s diesel export deal and recent drone strikes
A shipment of Russian diesel to the United States was anticipated to depart on Thursday, following an agreement between President Donald Trump and President Vladimir Putin. Last week, Trump suspended Graham Act penalties on Russia, removing tariffs that would have impacted Russian fuel exports. Meanwhile, Ukraine has increased drone attacks targeting Russian oil infrastructure, with Trading Economics noting that these strikes indicate Kyiv’s efforts to prevent Moscow from expanding its diesel exports.
Oil prices extended their upward trajectory on Thursday, October 22, following a drone attack that resulted in two fatalities at Saudi Aramco’s Shaybah oil field. Brent prices surpassed $111 a barrel, while WTI rose above $99. Additionally, the US government advised some personnel and their families to evacuate US embassies in Saudi Arabia. Investors continue to monitor Gulf shipping activity, Saudi oil supplies, and Russian fuel exports for clues about the next possible price movements.