Brent crude jumped on Friday, October 23, to its highest level in more than five months, at around $114.5–114.7 a barrel. Investors fear the US may resume attacks on Iran, and Tehran has threatened retaliation against energy and technology facilities in the Gulf region.
According to CNBC, Brent futures at 6:51 a.m. New York time (12:51 p.m. in Poland) were up 1.1 percent at $114.49 a barrel. US crude WTI rose 1.6 percent to $101.04. The Guardian reports that Brent reached $114.72. A week earlier, according to Bloomberg, prices hovered just below $110, which were the highest levels since May.
Why markets are worried
According to the Guardian, Tehran has threatened retaliatory attacks on oil and technology facilities in the Persian Gulf. Susannah Streeter of Wealth Club, quoted by the paper, notes that concern is growing about a possible order for US and Israeli strikes on Iranian energy infrastructure after the US elections on November 3.
On Thursday, the Islamic Revolutionary Guard Corps (IRGC), according to the Iranian agency Tasnim, reported that four ships had been hit and caught fire in the Persian Gulf, and three more had struck mines in the Strait of Hormuz. The Iranian army chief was also reported to have said the armed forces were ready for asymmetric warfare. Washington disputes these reports.
White House position
On Truth Social, Donald Trump accused Iran of driving up oil prices ahead of the US midterm elections.
„Iran is doing everything it can to push up the price of oil before the midterm elections in the USA. They are even making up hits, mines and everything else, because more oil is now flowing through the Strait of Hormuz than before the conflict began.” — Donald Trump on Truth Social, October 22
The White House has repeated a similar claim.
US Energy Secretary Chris Wright told Fox News that oil flows had recovered to about 80 percent of their pre-war level, although supplies of refined products remain limited (according to Bloomberg).
Price context
Bloomberg reports that Brent has gained about 80 percent this year. Hamad Hussain, an analyst at Capital Economics, says the risk to prices is „clearly skewed to the upside”. Kpler, according to the agency, recorded at least 18 attacks on ships within two weeks.
What it means for readers in Poland
Oil is priced in dollars, so fuel prices at petrol stations depend on both crude quotations and the zloty exchange rate. More expensive oil usually feeds into wholesale diesel and petrol prices with a lag of days. Drivers and transport companies should expect pressure on fuel prices and, over the longer term, on inflation too. If the tensions persist, they will affect transport costs and the prices of goods.
