Oil Rises Amid Growing Escalation Risks, Tanker Attacks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices rose Friday (10/30) morning after a tanker was 
struck in the Strait of Hormuz and market participants weighed the growing 
likelihood of a re-escalation in the U.S.-Iran war following next week's U.S. 
elections.

   By 09:00am ET, ICE Brent for December delivery was up $2.33 to trade near 
$117.21 bbl, and NYMEX WTI for December delivery rose $1.86 to $103.86 bbl.

   Downstream, NYMEX ULSD for November delivery advanced $0.089 to $4.825 
gallon, and front-month RBOB futures appreciated $0.041 to $3.226 gallon.

   The US dollar index softened by 0.235 points to 101.655 against a basket of 
foreign currencies.

   Iranian attacks on shipping have intensified over the past few weeks, with 
October recording more incidents than any other month since the start of the 
conflict at the end of February. The United Kingdom Maritime Trade Operations 
Center late Thursday reported that yet another tanker suffered damage after 
being hit by an explosives-rigged boat in the Strait of Hormuz. The maritime 
safety watchdog has recorded 43 security incidents involving commercial vessels 
in the region so far this month, 30 of which were attacks on tankers.

   Uncertainty over the direction of the war following the U.S. midterm 
elections remained elevated amid conflicting signals. A Qatari delegation 
reportedly arrived in Tehran Friday as part of recently stepped-up mediation 
efforts, and U.S. Vice President JD Vance earlier this week proposed a return 
to direct negotiations. At the same time, a growing number of reports are 
suggesting that the U.S. and Israel were independently considering launching 
fresh attacks on Iran after next week's elections. 

   U.S. President Donald Trump, who was last briefed on strike options 
Thursday, has ramped up bellicose rhetoric on the campaign trail this month, 
hinting at delivering a decisive blow to permanently end the war. Amassing U.S. 
forces in the region additionally fed re-escalation concerns. Four weeks ago, 
the U.S. launched the third aircraft carrier group toward the region, followed 
a day later by the deployment of amphibious landing units, expected to arrive 
at Iranian shores by the end of November.

   Crude oil futures, meanwhile, were on track for the fourth consecutive 
monthly increase, reflecting both returning and newly emerging risks to Middle 
Eastern oil exports. On Friday morning, front-month Brent and WTI futures were 
trading 13% and 15% higher than at the beginning of October, eyeing their 
largest month-on-month increases since the July rally that was fueled by the 
breakdown of the U.S.-Iran ceasefire.




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