Oil hits $117 as Iran lists Gulf tech hubs for strike

Brent crude futures briefly exceeded $117 per barrel on Friday, marking the highest price point since April. The benchmark settled just above $116, representing a gain of more than 2.7 percent from the previous day's close.

The price spike followed announcements from Tehran regarding potential retaliation targets. Iranian officials stated that if the United States and Israel launch a new joint offensive, Iran will strike oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf. This expansion of the target list to include digital assets has increased risk premiums for energy and technology sectors alike.

Market participants responded to reports that the US is considering renewed military strikes on Iran. These plans are reportedly timed for after the midterm elections on November 3. Richard Hunter, a broker at Interactive Investor, noted that this shift from diplomatic efforts to potential military action was sufficient to drive the price surge. He observed that the conflict, initially viewed as brief, is now entering its eighth month.

The current price levels reflect a sustained period of high costs. In February, before the war began, Brent crude traded at approximately $72 per barrel. By late April, prices had reached $126. The recent volatility is compounded by physical threats to shipping. The Islamic Revolutionary Guards Corps claimed strikes on four commercial ships in the Strait of Hormuz on Wednesday, a critical chokepoint for global oil shipments.

Regional instability has prompted diplomatic movements. The US State Department ordered some diplomats and employee families to leave Saudi Arabia. This action comes as Houthi rebels based in Yemen continue attacks on the kingdom. Susannah Streeter, chief investment strategist at Wealth Club, highlighted that fears are mounting that US and Israeli forces may target Iranian energy infrastructure after the November 3 elections.

Streeter pointed out that the journey through the Strait of Hormuz remains dangerous due to projectiles fired at maritime traffic. She added that Ukraine’s bombardment of Russian diesel refineries is also impacting global supply chains. These combined pressures on supply and demand are complicating the market environment for energy buyers and investors.

The convergence of military timing, expanded target lists, and physical disruptions to shipping lanes has kept prices elevated. Traders are monitoring the Strait of Hormuz for further incidents while awaiting clarity on US military plans post-election.