Brent crude settles near $117 after Iran targets Gulf digital infrastructure

Fuel costs for consumers and businesses rose this week as Brent crude reached its highest level since April. The international benchmark price for oil spiked by approximately 3.5 percent on Friday, briefly exceeding $117 per barrel before settling just above $116. This move marks the steepest single-day gain in more than six months.

The price increase followed statements from Iranian officials regarding potential targets for retaliation. Tehran indicated that a new joint US-Israeli offensive would trigger strikes against oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf. Richard Hunter, a broker at Interactive Investor, noted that the shift from diplomatic efforts to military planning was sufficient to cause the spike in prices. He observed that the conflict, initially viewed as brief, is now entering its eighth month.

Market analysts attribute the volatility to widespread reports that the United States is considering renewed military strikes on Iran. These plans appear timed for after the November 3 midterm elections. Susannah Streeter, chief investment strategist at Wealth Club, stated that fears are mounting that American and Israeli forces may target Iran’s energy infrastructure following the elections. She also pointed out that Houthi rebels based in Yemen have intensified attacks on Saudi Arabian facilities this week.

Regional tensions have intensified throughout the current week. The Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz on Wednesday. This strait serves as a critical chokepoint for global oil shipments, and recent incidents have made navigation increasingly risky for commercial vessels. In response to the instability, the US State Department ordered some diplomats and the families of US government employees to leave Saudi Arabia.

The current price levels represent a continued period of elevated costs compared to the start of the year. In February, before the war with Iran began, Brent crude traded at approximately $72 per barrel. By the end of April, tensions had driven the price to $126 per barrel. Streeter added that Ukraine’s bombardment of Russian diesel refineries is also impacting global supply chains, further complicating the market environment.