The Zhitong Finance App learned that as the conflict between the Middle East and Russia and Ukraine continues to threaten global energy supply, international oil prices rose sharply on Friday, and Brent crude oil hit 110 US dollars per barrel for the first time since May this year. Since it is difficult to significantly ease the tight supply situation in the short term, traders increased their bullish bets before the weekend, driving up international oil prices for the second week in a row.
On Friday, Brent crude futures rose 3.7% to close at $109.86 a barrel, once hitting $110 intraday; US WTI crude futures rose 3.5% to close at $101.41 a barrel. Due to the continued impact on energy supply in the Middle East and Russia, international crude oil prices have increased by more than 75% since this year.
Recently, geopolitical risks in the world's major energy exporting regions have once again heated up. The Iran-backed Houthis continue to launch missile and drone attacks on Saudi Arabia, while Russia and Ukraine continue to launch retaliatory attacks on each other's energy infrastructure, heightening market concerns about disruptions in the supply of crude oil and refined oil products.
Rebecca Babin, senior energy trader at the Canadian Imperial Bank of Commerce Private Wealth Group, said: “After a brief resurgence, the oil market had to re-factor risk into the price, especially as the weekend approaches.”
Notably, the last time Brent crude reached this price level was nearly five months ago. At the time, global crude oil and fuel transportation was severely hampered by the Middle East conflict, and the parties concerned then reached a fragile and short-lived agreement, which reopened the Strait of Hormuz for a while. Today, although crude oil traffic on this major global energy transportation route is gradually returning to pre-war levels, the total amount of crude oil transported through the strait last week exceeded 100 million barrels, and international oil prices remain high, indicating that market concerns about energy supply risks have not subsided.
At the same time, the level of tension in the global refined oil market is particularly prominent. On Friday, the settlement price of diesel futures in New York reached $4.90 per gallon, and both diesel and gasoline futures prices were at their highest level in the same period in history. European diesel futures have more than doubled since this year, clearly surpassing that of crude oil.
Russian diesel continues to be excluded from the global market, which is an important factor driving up the price of refined oil products. Due to limited Russian supply, refineries in other regions have had to increase crude oil processing to meet global fuel demand.
US President Trump previously reached an agreement with Russia to release hundreds of millions of barrels of diesel to the market to ease the pressure on energy supply. However, US congressmen proposed a bill on Friday to try to block this arrangement, reflecting widespread opposition within the US to measures that could increase Russia's fiscal revenue. Despite Trump's reaffirmation that Russia will fulfill its promise to release diesel supplies, Russia and Ukraine continue to launch attacks on energy infrastructure, making it uncertain whether the agreement can be successfully implemented. According to Reuters, Russia's Ryazan refinery was recently attacked, further raising market concerns about the country's ability to export refined oil and refined oil products.
Apart from the Russian energy supply issue, the situation in the Persian Gulf has also become the focus of close attention of traders. Trump recently said in an interview that it is not ruled out that the use of a large bomb known as the “mother of bombs” against Iran after the November 3 US midterm elections is not ruled out. Earlier, media reports said that the US has drawn up plans for possible military strikes against Iran, which may include the use of GBU-43/B large air explosives.
The Eurasian Group, a political risk consulting agency, raised the probability of further escalation of the Middle East conflict from 35% to 65% in its latest report. An analyst at the agency said, “The conflict is likely to escalate. As far as the US is concerned, the current stalemate is unsustainable.”
Continued high energy prices are also putting the Trump administration under increasing political pressure. As the November 3 midterm elections approach, how to reduce domestic fuel costs has become an urgent issue for the White House.
To ease supply constraints, the US government has tried to reduce oil prices by using emergency oil reserves and lobbying other countries to increase supply. On Friday, the US announced that it plans to provide up to 17 million barrels of crude oil from strategic oil reserves to increase market supply. However, there is a clear divergence between the recent performance of the crude oil futures market and the supply tension signals that the spot market continues to release.
Despite the worsening global energy security situation over the past week, crude oil futures prices remained range-bound for most of the time until Friday, and did not rise significantly until Friday. This differentiation has traders worried that the market may be underestimating the risk of potential supply disruptions.
In the context of a highly uncertain geopolitical situation, some investors chose to reduce their positions to avoid losses due to unexpected news. The number of open Brent crude futures contracts fell to its lowest level since March 2025 earlier this month. Furthermore, recent increases in Brent crude oil have mostly lagged behind US WTI crude oil, leading to a narrowing of the price difference between the two. To a certain extent, this is related to the decline in transportation costs for US crude oil exports.
According to data from the Baltic Sea Exchange, the cost of transporting a typical crude oil cargo from the US Gulf coast to Rotterdam in the Netherlands fell by about 12% in the past week, increasing the competitiveness of US crude oil in the international market.
At the same time, commodity trading advisors' (CTA) trend tracking trading strategies and other technical factors have also contributed to the relative strength of U.S. crude oil.
As the risk of escalating conflict in the Middle East rises, the prospects for Russian diesel supply are uncertain, and the global market for refined oil products continues to be tight, international energy prices are still facing significant upward pressure. Although the US government is trying to stabilize the market through measures such as releasing strategic reserves, the subsequent development of the geopolitical situation will still be a key factor affecting the trend of international oil prices.