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Brent crude surges to $110 on Middle East, Russia supply fears
Oil hits five-month high as renewed attacks on energy infrastructure by Iran, Houthis and Ukraine threaten global supplies ahead of US midterm elections.
What happened
Brent crude touched $110 per barrel on Friday for the first time since May, driven by escalating tensions in the Middle East and disruptions to Russian energy supplies. The international benchmark rose 3.7%, closing at $109.86, as traders assessed intensifying attacks on tankers in the Strait of Hormuz, strikes on Saudi energy facilities by Iran-backed Houthis, and Ukrainian assaults on Russian refineries.
Iranian officials disclosed they had adopted new tactics to target shipping about 10 days ago, explicitly aiming to keep oil prices elevated and influence US midterm elections. Meanwhile, crude exports through Hormuz pulled back to 9.4 million barrels per day—about 70% of pre-war levels—after briefly recovering in September, signaling renewed supply anxiety despite the waterway remaining nominally open.
Diesel prices proved especially vulnerable, averaging $6.33 a gallon in the US on Friday, more than 70% above year-ago levels. The International Energy Agency warned that diesel constraints could persist well into 2027, with combined exports from the Middle East and Russia plunging over 60% annually.
The Trump administration released 17 million barrels from the Strategic Petroleum Reserve on Friday, continuing a 172-million-barrel drawdown authorized in March. The SPR now stands at 283 million barrels—its lowest since 1982—leaving limited room to cushion further price shocks ahead of the November midterm elections.
Chanakya's Move
Iran is executing a calculated escalation strategy: Iranian officials are openly admitting to new attack tactics aimed at keeping prices high and influencing US elections, leveraging oil as a political weapon while the Strait remains technically open (limiting US military justification for intervention). The move tests Trump's constraints: he cannot easily attack Iranian assets without risking further price spikes or broader conflict just before midterms. Meanwhile, the US is racing to drain its SPR—now at a 44-year low—to suppress prices, but runs out of leverage if attacks accelerate. Ukraine and the Houthis amplify the pressure independently. The counter-move available to Trump is negotiation (a Russian diesel deal is in play) or a dramatic military action that risks backfiring economically.