Oil advances towards $100 as tanker attacks persist

Oil prices climbed for a second consecutive session on Friday as attacks on commercial vessels in the Middle East revived supply concerns, even as expectations of a possible end to the war with Iran kept crude on course for a steep weekly decline.

Brent futures rose 1.31% to $99.58 a barrel during early trading, having briefly crossed $100, while US West Texas Intermediate gained 0.95% to $91.38. Both benchmarks were heading towards weekly losses of approximately 12%, despite recovering from a dramatic midweek selloff.

Thursday’s rebound lifted Brent by $3.67, or 3.88%, to settle at $98.29 a barrel. WTI closed $2.40 higher, a gain of 2.72%, at $90.52. The advances followed Wednesday’s plunge of more than 8% in both contracts, which took settlement prices to their lowest levels since 31 August.

The market’s abrupt reversal reflects competing assessments of political developments in Washington and physical supply risks around the Gulf. Democratic victories in both chambers of the US Congress have encouraged expectations that President Donald Trump could face stronger pressure to pursue diplomacy rather than prolong the US-Israeli military campaign against Iran.

However, the election outcome has not produced a ceasefire or a settlement between Washington and Tehran. Traders remain concerned that further attacks on shipping could interrupt deliveries even if diplomatic contacts intensify, limiting the immediate effect of expectations that the conflict might end.

Fresh incidents involving oil tankers helped restore some of the risk premium removed during Wednesday’s selling. Iran reported three additional tanker attacks on Thursday, while maritime security information from the United Kingdom indicated that incidents involving oil-carrying vessels remained at elevated levels.

At least five vessels have reported attacks in the Persian Gulf since Sunday, underscoring the danger facing merchant shipping. The Strait of Hormuz remains particularly sensitive because it connects Gulf producers with international markets and has been affected by restrictions and security threats during the conflict.

The continuing incidents have complicated calculations about how quickly normal oil shipments could resume. A diplomatic agreement would not automatically remove hazards to vessels, resolve insurance difficulties or restore confidence among shipowners and charterers. Those practical considerations have supported prices despite the sharp reassessment of the war’s likely duration.

Political uncertainty has also remained substantial. Trump’s Republican Party suffered a major setback in Tuesday’s midterm elections, with voters expressing dissatisfaction over the war and the cost of living. The president has defended the campaign, while Vice President JD Vance has acknowledged its contribution to the electoral defeat.

The shift in congressional control could strengthen scrutiny of military spending and policy, but it does not by itself determine the administration’s military decisions. Officials and regional governments therefore face an uncertain period as Washington weighs whether to maintain operations, escalate them or pursue negotiations.

Diplomatic efforts involving regional intermediaries have raised hopes of de-escalation, although the positions of Washington and Tehran remain divided. Iran has demanded changes to restrictions affecting its ports and financial access, while the security of passage through Hormuz remains central to discussions about restoring normal trade.

For oil traders, the combination of political headlines and maritime incidents has produced unusually large daily movements. Brent has moved across a wide trading range this week, with the speed of the decline illustrating how quickly expectations about geopolitical disruption can alter futures prices.

Physical supply conditions have offered a more mixed picture. Gulf petroleum exports have recovered from earlier interruptions, easing fears of an immediate shortage, but transport costs and threats to shipping continue to complicate deliveries. The distinction between available production and reliably delivered barrels remains important for refiners buying crude.

US inventory figures have provided another measure of market tightness. Commercial crude stocks fell by 865,000 barrels in the week ended 30 October, while distillate inventories declined by about 3.57 million barrels, indicating continuing draws in key fuel supplies despite the broader shift in expectations.

Market participants are also watching the gap between near-term and later-dated crude contracts. A premium for prompt deliveries can signal continuing concern about immediate availability, even when outright prices fall. Such differences matter to buyers arranging shipments while regional security conditions remain unsettled and unpredictable.

The latest trading also followed a warning of possible danger near Yanbu, Saudi Arabia’s Red Sea export hub, extending attention beyond Hormuz to alternative routes used to move crude to international customers.