Oil prices climbed by more than $2 on Wednesday 21 October, pushing Brent close to a five-month peak as escalating maritime incidents in the Middle East and falling US fuel stockpiles heightened concerns over global supply, reported Reuters.
By 10:48 GMT, Brent crude contracts had risen by $2.06, or 1.9%, to $110.85 per barrel (bbl).
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US West Texas Intermediate (WTI) crude had advanced by $2.13, or 2.2%, to trade at $99.95/bbl.
Maritime tracking intelligence from Kpler revealed that at least 18 vessel attacks had taken place across the region during the preceding fortnight.
Analysts at LSEG warned that Iranian operations were hitting tankers beyond the Strait of Hormuz and extending into the Gulf of Oman, imperilling ship-to-ship transfers and regional crude loadings.
The escalation follows an announcement on 19 October by Yemen’s Iran-aligned Houthis, who claimed responsibility for attacks directed at a Saudi Aramco site in Yanbu, the Shaybah oilfield, and airports in Riyadh and Abha.
Diplomatic efforts to resolve the wider conflict have yielded little progress.
Iranian state news outlet Nournews reported that Tehran had informed Pakistan’s army chief that negotiations with Washington would not resume until Iranian demands were addressed, despite the arrival of a Qatari delegation in Tehran.
In a televised interview, Iranian Foreign Minister Abbas Araqchi stated that neither Saudi Arabia nor the Houthis had replied to Tehran’s offer to help broker peace discussions.
The gains reversed losses from 20 October, when Brent and WTI retreated from five-month and six-month highs, respectively, after Iran’s president met Pakistan’s army chief in Tehran to discuss mediation.
Upward price pressure was further supported by contracting inventories in the US.
Market sources citing American Petroleum Institute data indicated that domestic crude stockpiles dropped by 4.9 million barrels (mbbl) during the week ending 16 October, alongside drawdowns from distillate and gasoline inventories.
Separately, two US Department of Energy officials said on 20 October that they were engaging with international refiners to increase global fuel output.
Meanwhile, Russian diesel cargoes resumed journeys to Turkey and Brazil after the US suspended sanctions, according to Kpler and LSEG shipping figures.
HSBC Group CEO Georges Elhedery also noted that alternative Gulf transport investments could make the Strait of Hormuz “redundant” in five years, bypassing a corridor that previously handled a fifth of global oil and liquefied natural gas trade.
