"The market expects the conflict to escalate": Oil prices jumped to their highest level since April

Oil prices rose on October 30 to their highest levels since late April, Reuters reported. Traders are bracing for a potential escalation of the war in the Middle East following the U.S. midterm elections, and the attack on a tanker in the Strait of Hormuz underscores the risks to supplies from the Middle East, the agency notes.

On October 30, Brent crude oil futures for December delivery rose by more than 2% to an intraday high of $118 per barrel. This contract expires on Friday. The more actively traded January contract also jumped by more than $3 on Friday, trading above $114 per barrel. U.S. WTI futures, in turn, rose to nearly $105. By the end of October, Brent could be up 13%, and WTI 15%, the agency reports. This would mark the fourth consecutive month of gains for both grades.

"Traders will continue to monitor oil supplies from the Middle East and the potential escalation [of the Middle East conflict] by the U.S. and its allies," said Dennis Kissler, senior vice president of trading at BOK Financial. On October 30, Fox News sources reported that the movement of U.S. forces in the region is intended to ensure the military is prepared in case U.S. President Donald Trump “asks them to take action.” However, Fox News notes that there are no signs that he has already decided to resume strikes or launch an operation against Iran. The Wall Street Journal reported this week, citing sources, that the U.S. had warned several Gulf states to prepare for a short but intense military campaign following the U.S. midterm elections. The same sources also said that U.S. troops are replenishing ammunition stocks in the Middle East, while bombers and fighter jets are preparing to launch strikes. “Next month, another aircraft carrier strike group and a Marine expeditionary unit are expected to join the fleet of about 20 warships operating in the region, although some of the ships may be withdrawn from the region as part of a rotation,” the newspaper also noted.

In addition, investors are reacting to an attack on a tanker in the Strait of Hormuz. The incident was reported by the U.K. Maritime Trade Operations, according to CNBC. According to Reuters sources in the shipping industry, a small boat attached two magnetic mines to the tanker’s hull, which ultimately caused a fire in the engine room and temporarily disabled the vessel. This was the first successful use of such explosives in the strait since the start of the war in the Middle East in February, the agency notes.

"Ongoing military operations in the Strait of Hormuz and doubts about the possibility of reaching a diplomatic solution are keeping oil prices high: the market expects the conflict to escalate in the coming weeks," — said Sol Kavonik, head of energy research at MST Marquee, according to Reuters.

This article was AI-translated and verified by a human editor