Oil Prices Near $100 Amid Mideast Shipping Attacks

Oil prices saw a decline on Friday but are poised to finish the week above $100 a barrel for the first time since mid-May. This trend is driven by escalating attacks on key Middle Eastern shipping routes, fueling concerns about prolonged supply disruptions.

Brent crude futures dropped 1.6% to $105.86 per barrel, while U.S. West Texas Intermediate (WTI) fell 1.2% to $101.22. Both benchmarks had surged over 6% on Thursday and are up approximately 13% for the week, marking the largest weekly gain since mid-July.

The Houthi group's seizure of Yemen's Al Hudaydah port on Thursday poses an additional threat to Red Sea navigation. This comes as traffic through the Strait of Hormuz has decreased amid intensified attacks on oil tankers in the region.

Analysts suggest that attacks originating from Yemen targeting Saudi energy facilities represent an escalation beyond Iran and the Strait of Hormuz, raising fears of long-term regional instability. U.S. President Donald Trump warned of potential U.S. strikes in Iran, near the Natanz uranium enrichment facility, and predicted the war's end after the November midterm elections.

Tony Sycamore, an analyst at IG, noted that Iran's willingness to expand and prolong the conflict increases the likelihood of WTI retesting its March high of $119.48. Iran announced it attacked 10 vessels near the Strait on Wednesday, following U.S. strikes on five Iranian oil tankers. The Islamic Revolutionary Guard Corps vowed to escalate its response to any further attacks.

Meanwhile, the average national diesel price in the U.S. surpassed $6 per gallon on Thursday for the first time, attributed to supply constraints from the U.S.-Israel war on Iran and Ukrainian attacks on Russian refineries. OPEC has also lowered its 2026 global oil demand growth forecast to 380,000 barrels per day, its fifth consecutive downward revision, while OPEC's August production fell by 640,000 barrels per day.