Oil Prices Surge to $116.72 per Barrel as Middle East Conflict Threatens
Global Energy Supplies
Investors have grown increasingly
concerned that the war in Iran could escalate again, putting energy supplies at
greater risk.
1.
Brent Crude Hits Highest Level Since April: Brent
crude rose to $116.72 per barrel on Friday, recording a 6.2% weekly
increase, its biggest weekly rise in two months.
2.
Sharp Increase Since War Began:
o
Brent crude has risen 60% since the US and
Israel launched attacks on Iran on February 28, 2026.
o
US benchmark WTI crude crossed $103 per barrel,
gaining more than 50% since the war began.
3.
US Fuel Prices Rise:
o
Petrol (gasoline): US
national average reached $4.29 per gallon, more than 40% higher since
the conflict began.
o
Diesel: Increased to $6.31 per gallon,
approaching its September peak of $6.51.
o
Gasoline prices remain below their May peak of
$4.55 per gallon.
4.
Oil Prices Expected to Remain Elevated:
Investors increasingly doubt that the conflict will end soon. Futures contracts
indicate that Brent crude could remain above $100 per barrel through April.
5.
Strait of Hormuz Disruptions: Attacks
on shipping in the Strait of Hormuz have heightened concerns about global oil
supplies. Before the war, approximately one-fifth of the world's oil supply
passed through this strategic waterway.
6.
Escalating Regional Hostilities:
o
Attacks on energy vessels in the Middle East
reached their highest level since the war began, according to Deutsche Bank
data.
o
The Iran-backed Houthi militia attacked an airport
in Saudi Arabia, killing two people.
o
The incident prompted the US to withdraw some
diplomatic personnel.
o
Oil shipments recovered somewhat in September but
declined again in October.
7.
Stock Markets Under Pressure: Rising
oil prices and concerns about prolonged supply disruptions weighed on US
equities. The S&P 500 fell 0.5% on Friday, adding to losses from the
previous trading session amid a sell-off in technology shares.
8.
Prospect of Further Military Escalation:
Investors are concerned about the possibility of a prolonged conflict. Reports
that US and Israeli militaries have developed plans for renewed attacks on Iran
after the US midterm elections have added to market uncertainty.
Effect on
the Global Economy and India
·
Higher import costs:
Sustained crude prices above $100 per barrel would increase the import bill of
major oil-importing countries, including India.
·
Inflationary pressure: Higher
crude prices can raise domestic fuel, transportation and manufacturing costs.
·
Trade deficit risks: An
increased oil import bill could put pressure on India's trade balance and
current account.
·
Market volatility:
Continued geopolitical tensions and uncertainty over oil supplies could weigh
on global equity markets and investor confidence.
Key takeaway: Brent
crude's rise to $116.72 per barrel highlights the growing threat to
global energy supplies from the Middle East conflict. Continued disruptions
around the Strait of Hormuz and the risk of further military escalation are
increasing the likelihood of persistently high oil prices.
Oil
prices rose further on Friday (24.10.2026), as hostilities across the Middle East
continue to raise fears in the energy markets that the oil supply from the region
would remain throttled.
The
price of Brent crude, the international oil benchmark, rose to $116.72 a barrel
on Friday, taking its increase for the week to 6.2 percent, its biggest weekly rise
in two months.
Brent
prices have risen 60 percent since the United States and Israel launched attacks
on Iran on Feb. 28 and are now at their highest level since April, and close to
their highest levels since the war began.
WTI,
the U.S. benchmark, topped $103 a barrel on Friday, up more than 50 percent since
the start of the war.
The
jump in oil prices has pushed energy costs higher for Americans, with the national
average price of gasoline rising to $4.29 a gallon on Friday, according to the AAA
motor club. The price is just below its peak in May of $4.55 and still more than
40 percent higher since the war began. Diesel prices also nudged higher on Friday,
to $6.31 a gallon, still close to their peak in September of $6.51.
Investors
have grown increasingly wary over the Trump administration’s war in Iran, discounting
the likelihood that the conflict will be resolved soon. The price of Brent is expected
to remain above $100 through April, according to futures contracts on Friday.
Attacks
have escalated in the Middle East, particularly on ships in the Strait of Hormuz,
the vital waterway through which roughly a fifth of the world’s oil supply was shipped
before the war. The Iran-backed Houthi militia attacked an airport in Saudi Arabia
this week, killing two people and prompting the United States to withdraw some diplomatic
staff.
Strikes
on energy vessels in the Middle East this month are at the highest level since the
war began, based on data from Deutsche Bank. The conflict has drastically slowed
oil supplies leaving the region. Oil shipments recovered somewhat in September but
slumped again this month.
The
rise in oil prices appeared to weigh on the stock market. The S&P 500 fell 0.5
percent on Friday, adding to losses the day before that were driven by a sell-off
in tech shares.
Investors
are also grappling with the uncertainty of what may come in the months ahead, and
the prospect of oil prices remaining elevated for longer than previously thought.
The U.S. and Israeli militaries have reportedly developed plans to attack Iran after
the midterms.