LONDON / ConSynSer / – Oil markets experienced an uptick on Wednesday, October 21, with Brent crude futures increasing by $1.21 to reach $110 per barrel, according to Reuters. Meanwhile, US West Texas Intermediate crude also advanced more than $1, hitting $99 per barrel. This surge occurred amid a highly volatile trading session influenced by fresh assaults on shipping and energy infrastructure in the Middle East. Investors balanced these risks against signs of a recovery in crude exports from the Gulf region. Compared to last year, Brent is nearly 80% higher.
The Revolutionary Guards of Iran announced that naval mines had stopped three tankers traveling through routes Iran deems unauthorized. The UK Maritime Trade Operations reported an incident where a vessel was struck near Oman. Yemen’s Houthis claimed responsibility for attacks on Saudi Aramco facilities at Yanbu and the Shaybah oilfield. They also reported strikes on airports in Riyadh and Abha. These events reignited fears over supply routes passing through the Strait of Hormuz.
Throughout the day, prices fluctuated significantly. Brent’s gains diminished later in trading, dropping below $108 at one point. WTI briefly surged to $100 before slipping below $98. Elevated freight rates in the Persian Gulf continued to support prices. According to Trading Economics data, Brent has increased approximately 8% over the past month. Additionally, oil prices rebounded in late September after a four-session decline.
Gulf export flows counter supply concerns
US Secretary of State Marco Rubio stated that shipments through the Strait of Hormuz are nearing prewar levels. Data from Kpler and Vortexa tracking tankers indicate that Middle East crude exports have increased since summer. Exporters are ramping up shuttle shipments through Hormuz and conducting ship-to-ship transfers in the Gulf of Oman. Saudi crude exports in August rose by 7.9%, reaching their highest since March. This resurgence in flows helped restrain the price gains seen during Wednesday’s trading session.
US inventory reports also played a role in market movements. The Energy Information Administration reported a decline of just over 3 million barrels in US crude stocks last week. Conversely, the American Petroleum Institute had recorded a larger decrease of 4.9 million barrels. Currently, US weekly crude production stands at approximately 13.27 million barrels per day, down from 13.68 million the previous week. Lower inventories suggest a tighter supply landscape in the world’s largest oil-consuming nation.
Focus shifts to Russian diesel exports and Saudi strikes
Russia is expected to send its first diesel shipment to the United States on Thursday, following an agreement between President Donald Trump and Russian President Vladimir Putin. Last week, Trump waived Russia sanctions under the Graham Act, facilitating this transaction. Meanwhile, Ukraine has conducted large drone attacks targeting Russian oil infrastructure, signaling Kyiv’s intent to prevent Moscow from expanding diesel exports, according to Trading Economics.
On Thursday, October 22, oil prices climbed once again after a drone attack on Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent moved above $111 per barrel, and WTI surpassed $99. The United States has also ordered some personnel and their families to leave its embassies in Saudi Arabia. Market participants continue to monitor Gulf shipping activity, Saudi crude output, and Russian fuel flows to determine the next price trajectory.