Brent crude climbed above $116 a barrel on Friday, hitting its highest level since March, as markets assessed the risk of a prolonged confrontation between the United States and Iran. West Texas Intermediate also advanced, trading above $101 a barrel. The rally followed escalating clashes involving Yemen’s Iran-aligned Houthi movement and Saudi Arabia, with reports that Saudi Aramco ordered staff to evacuate its headquarters in Dhahran after Houthi attacks killed four people in Saudi Arabia.
US Ambassador to the United Nations Mike Waltz told the Financial Times that Washington was prepared for a prolonged standoff with Tehran, potentially lasting another year if no agreement is reached on Iran’s nuclear programme and shipping through the Strait of Hormuz. The United States could maintain its blockade of Iranian ports indefinitely while tightening economic pressure. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu have also renewed threats of a possible fresh offensive after the November 3 US midterm elections.
Supply risks were compounded by an oil spill off the UAE coast, heightened concern over the Bab el-Mandeb Strait, and a pipeline shutdown in Libya that reduced output from two oilfields. UBS analyst Giovanni Staunovo said volatile oil flows and elevated freight rates left the market undersupplied. Meanwhile, US stocks tumbled on AI fears, with the Nasdaq falling 5% and the 10-year Treasury yield below 5%, adding to a broader risk-off tone across global markets.
