Oil Settles at Six-Month Highs as Brent Closes at $117.64

Oil prices jumped more than 2 percent on Friday, October 30, and settled at their highest levels since the end of April, as an attack on a tanker in the Strait of Hormuz reminded traders how fast Gulf supply can be put at risk.

Brent crude futures for December, which expired on Friday, settled up $2.76, or 2.4 percent, at $117.64 a barrel, after touching a high of $118 during the session, Reuters reported from Houston. The more active January contract gained $2.63 to settle at $113.43. United States West Texas Intermediate crude settled $2.12 higher, up 2.08 percent, at $104.12 a barrel.

For October as a whole, Brent finished 13.6 percent higher and WTI rose 15.2 percent, a fourth straight monthly gain for both benchmarks.

A tanker hit in the strait

On Friday, a tanker in the Strait of Hormuz was hit by explosive devices attached to its hull by a small boat, the United Kingdom Maritime Trade Operations service said. It was not immediately clear who was behind the attack. Maritime sources said it was the first known successful strike in the waterway using limpet mines, explosives attached to a ship hull from a small boat, since the United States and Israeli war with Iran began in February.

The strait is the main sea outlet for Gulf crude and fuel. Ships have kept moving through it with naval help, but each new attack raises the insurance and security cost of every cargo and shortens the distance between an incident and a supply halt. Data from the Washington Institute for Near East Policy, cited in market reports, put the number of attacks on commercial vessels in and near the strait in October at the highest since 2017.

Traders look past the midterms

Traders told Reuters they were bracing for a potential escalation in the Iran war after the United States midterm elections on November 3. That timing matters for oil. A wider conflict after the vote, or new limits on Iranian exports, would hit a market that has already priced in months of attacks without a full closure of the strait.

Energy shares were among the few gainers in Friday's stock selloff, and big United States oil producers reported stronger than expected quarterly profits on October 30, helped by the high prices that the conflict has produced.

Key numbers

December Brent: $117.64 a barrel, up $2.76 or 2.4 percent, highest settlement since the end of April, after an intraday high of $118. January Brent: $113.43, up $2.63. WTI: $104.12, up $2.12 or 2.08 percent. October gains: Brent up 13.6 percent, WTI up 15.2 percent, a fourth straight monthly rise.

What happens next

The next test is physical, not financial. If tankers keep loading and transiting, prices can ease even with attacks in the headlines, as they did earlier in October. If an attack closes the strait or stops loadings at a major terminal, the six-month high will not hold for long, it will be passed. Traders will watch tanker traffic, war risk insurance rates and any United States or Iranian move after November 3.