CNBC – Oil prices rose on Friday, October 16, amid concerns over Middle East supplies amid ongoing tensions and the disruption of a Russian refinery due to Ukrainian shelling.
This comes as investors assess risks in the Middle East and potential U.S. measures to ease restrictions on the global "shadow fleet" tankers.
Brent crude futures rose by more than $3 to $109.58 per barrel, while U.S. West Texas Intermediate crude futures rose by more than $2, exceeding $100 per barrel.
U.S. crude rose by more than 3% at settlement in the previous session, after a drawdown of large quantities of U.S. crude oil inventories helped support prices, while Brent crude showed little change.
The International Energy Agency agreed on Thursday to withdraw more than 20 million barrels of diesel and pump them into the market, in addition to any remaining quantities from emergency reserves agreed to be withdrawn in March, in an effort to boost supply and curb soaring prices.
Haitong Futures stated in a note issued on Friday that oil prices rose overnight in the previous trading session, indicating that "investors are not satisfied with these measures."
The company added, "What will truly calm the oil market is easing the tension in the Middle East."
A U.S. official stated on Wednesday that President Donald Trump's administration is considering lifting sanctions on certain vessels belonging to the so-called "shadow fleet," which transports oil and petroleum products from countries including Russia, Iran, and Venezuela, in an attempt to lower global shipping prices that have reached historic highs, according to Reuters.
These discussions come days after Trump's decision to temporarily lift sanctions on Russian diesel, a move that faced sharp criticism from Ukrainian President Volodymyr Zelenskyy, European countries, and members of the Republican Party in the U.S. Senate.
Meanwhile, prices received support from the escalation of the conflict between Saudi Arabia and the Houthis in Yemen and renewed attacks on ships in the region.
The pace of attacks in the Strait of Hormuz has increased over the past ten days, as Iran announced the intensification of its strikes in response to the U.S. blockade of its ports and stricter sanctions imposed last month.
The Houthis fired missiles at the presidential palace complex in the southern city of Aden on Thursday, killing five people, while the Saudi-led coalition in Yemen revealed details of dozens of attacks on infrastructure in the Kingdom.
