An oil tanker at the Cochin Oil Terminal. (Image: Rangan Datta Wiki / Wikimedia Commons — CC BY-SA 4.0)
Oil prices smashed through $110 a barrel on Friday as a three-front assault on global energy supply — Iranian attacks in the Strait of Hormuz, Houthi missile strikes on Saudi Arabia, and Ukraine's vow to hit Russian refineries — rattled markets already strained by months of war.
Brent crude futures touched $110 for the first time since May before easing slightly to settle at $109.86, up 3.7% on the day, according to CNBC. U.S. West Texas Intermediate crude settled at $101.41, up 3.5%. For the week, WTI soared more than 10% while Brent gained nearly 5%.
The primary driver was the Strait of Hormuz, the chokepoint through which roughly a fifth of the world's seaborne oil passes. At least nine tankers and cargo vessels have come under attack there since Sunday as Iran seeks to choke off oil shipments through the waterway. On Wednesday, U.S. Central Command said Iran sank the container ship GFS Pride; the Singapore-registered vessel's crew was safely evacuated. The International Maritime Organization says the attacks have left three seafarers injured and two missing this week.
Shipments are visibly collapsing. Crude exports through Hormuz averaged 9.4 million barrels per day in the week ended Wednesday — about 70% of the average before the Iran war, according to energy researcher Kpler — and only around seven tankers crossed on peak tracking days, less than half the usual number. Gulf tanker rates have hit record highs, and war-risk insurance premiums are compounding costs for energy buyers.
Iranian officials told Reuters they intend to intensify strikes on tankers using new tactics, suggesting the assaults are unlikely to end soon. Separately, Israeli media reported that Prime Minister Benjamin Netanyahu urged President Donald Trump last week to resume bombing Iran before the midterm elections — a report Netanyahu denied.
A second front opened in Saudi Arabia. The kingdom's military said it intercepted multiple missiles over the Red Sea on Friday, including one believed to be headed for the Yanbu oil export terminal, and destroyed three drones over Riyadh and southern regions. The Iran-backed Houthis struck an administrative building belonging to state oil giant Aramco in Dhahran on Tuesday, and their Oct. 10 attack on Riyadh's international airport killed 12 people and injured more than 300.
A third front loomed in Europe, where Ukraine's president vowed fresh long-range strikes on Russian refineries in retaliation for attacks on Ukraine's own energy grid — undercutting an energy ceasefire President Trump had tried to broker and threatening Russian crude output.
For American consumers, the pain is already at the pump. U.S. diesel averaged $6.33 a gallon Friday, more than 70% above the same period a year earlier. With shipping risk in the strait at record highs and winter demand approaching, analysts expect oil prices to stay elevated — and several banks have lifted their near-term forecasts.