U.S. crude futures climbed back above $100 a barrel Friday as attacks near the Strait of Hormuz and uncertainty over Middle East supply added a larger risk premium to energy markets.
At 12:41 p.m. ET on October 16, Reuters reported that West Texas Intermediate futures, the U.S. benchmark, were up 2.8% at $100.67 a barrel. It was WTI's first move above $100 since September 21. Brent, the global benchmark, was up 3.2% at $109.34. Earlier social posts captured lower intraday prices, including Brent near $106.
The rally extended a volatile week. By that point, Brent had gained 4.1% for the week and WTI 8.6%. Reuters cited several pressures at once: concern over Gulf shipping, uncertainty about Russian diesel supply after a drone attack halted part of the Ryazan refinery, and a large U.S. crude-stock draw following hurricane-related production shutdowns.
Shipping risk is feeding the price premium
The Strait of Hormuz remains the central pressure point. About one-fifth of global oil and liquefied natural gas trade passed through the waterway before the war, according to Reuters.
A container ship and a dry bulk carrier sank near the strait after separate projectile strikes, maritime officials said October 14. All 21 crew members aboard the Singapore-flagged GFS Pride were safely evacuated. One crew member of the Cape Dao was killed after that ship was struck in September and later sank. Iran said it was stepping up attacks in response to the U.S. blockade of its ports and tighter sanctions. Reuters did not attribute the two strikes to a named attacker.
