LONDON / ConSynSer / – On Wednesday, October 21, Brent crude futures increased by $1.21 to reach $110 a barrel, according to Reuters, amid ongoing Middle East tensions that keep oil markets on edge. Meanwhile, US West Texas Intermediate crude rose by over $1, climbing to $99 a barrel. Early gains were driven by fresh incidents involving tankers and Saudi energy facilities, though they were later tempered by evidence of recovering Gulf export flows. Brent’s current level is nearly 80% higher than it was a year ago.
Iran’s Revolutionary Guards announced that naval mines had halted three tankers traveling through routes not authorized by Tehran. The UK Maritime Trade Operations agency reported a vessel struck near Oman. Yemen’s Houthi movement claimed responsibility for attacks on Saudi Aramco facilities in Yanbu and the Shaybah oilfield, as well as airports in Riyadh and Abha. These developments have intensified concerns over supply routes passing through the Strait of Hormuz.
Throughout the trading day, market movements remained volatile. Brent’s price temporarily retreated below $108 a barrel, while WTI briefly reached $100 before dropping back below $98. Freight rates in the Persian Gulf stayed at record levels, exerting additional upward pressure. Over the past month, Brent has gained roughly 8%. Prices had rebounded after Brent slid to $100.34 in September, and the benchmark remains significantly above that level.
Hormuz crude shipments near prewar levels
Secretary of State Marco Rubio stated that shipments passing through the Strait of Hormuz are approaching prewar levels. Data from tanker trackers Kpler and Vortexa indicate that Middle East crude exports have been increasing since summer. Producers have enhanced shuttle shipments through Hormuz and engaged in ship-to-ship transfers in the Gulf of Oman. In August, Saudi Arabia’s crude exports rose by 7.9%, reaching their highest level since March. These increased flows contributed to capping Wednesday’s rally.
Market participants also evaluated recent US inventory data. Crude stocks declined by just over 3 million barrels last week, as reported by the Energy Information Administration, which was less than the 4.9 million-barrel draw indicated earlier by the American Petroleum Institute. Weekly US crude production decreased to about 13.27 million barrels per day from 13.68 million a week earlier, providing a mixed outlook on US supply levels.
Russian diesel shipment deal and drone attack impacts
Russia was anticipated to dispatch its first diesel cargo to the United States on Thursday, following an agreement between President Donald Trump and President Vladimir Putin. Last week, Trump suspended Graham Act penalties, removing tariffs that would have affected Russian fuel exports. Meanwhile, Ukraine has intensified drone attacks targeting Russian oil infrastructure. Trading Economics noted that these strikes aim to prevent Moscow from expanding its diesel exports.
Oil prices continued to climb on Thursday, October 22, after a drone strike at Saudi Aramco’s Shaybah oil field resulted in two fatalities. Brent surpassed $111 a barrel, and WTI moved above $99. Additionally, the US government advised some personnel and their families to evacuate US embassies in Saudi Arabia. Traders keep a close eye on Gulf shipping, Saudi production levels, and Russian fuel exports to gauge potential future price movements.