Oil prices have reached their highest level in more than five months as concerns over fresh escalation in the Middle East conflict grip energy markets.
Brent crude, the international benchmark, rose by 1% on Friday morning to $114.72 a barrel – its highest level since May. The increase followed Tehran's statement that it would strike oil facilities, undersea cables, datacentres and AI facilities in the Gulf region if a new US-Israeli attack was launched against Iran.
Market Reaction to Strike Threats
Richard Hunter at the broker Interactive Investor said: "Widespread reports that the US is considering renewed military strikes on Iran after the midterm elections rather than pursuing a diplomatic route was enough for the price to pop, after what many had considered would be a brief conflict is now in its eighth month."
Oil had traded at about $72 a barrel in February, before the Iran war began, but soared to $126 a barrel by the end of April.
Rising Regional Tensions
Tensions in the region have been rising this week; Iran's Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the strait of Hormuz on Wednesday. The US state department ordered some diplomats and the families of US government employees to leave Saudi Arabia, which has faced continued attacks from Houthi rebels in Yemen.
Susannah Streeter, the chief investment strategist at the broker Wealth Club, said fears were rising that American and Israeli forces would be ordered to launch strikes on Iran's energy infrastructure after the US elections on 3 November.
Supply Concerns Intensify
Streeter noted that "the attacks on Saudi Arabia's facilities by Houthi rebels have intensified this week, and for ships attempting to cross the strait of Hormuz, it's still a dangerous journey, with projectiles still being fired."
Streeter also said Ukraine's bombardment of Russian diesel refineries was adding to supply concerns.
