The price of Brent crude oil jumped above $117 for the first time since April

The escalation of the conflict in the Middle East has reignited market concerns about threats to global supplies, according to Bloomberg. During trading on October 23, the price of Brent crude oil jumped to an intraday high of $117.45 per barrel for the first time since April, the Financial Times notes. The rise in energy prices is fueling higher inflation expectations in the U.S., the newspaper notes.

At their peak on October 23, Brent contracts for December delivery rose by more than 3%. December futures for U.S. WTI crude also jumped on Friday to $103.3 (an increase of more than 3% from the previous close).

Overall, oil prices have risen by 20% since the beginning of September, according to the FT. The newspaper attributes this price surge to concerns that the U.S. and Israel may intensify attacks on Iran after the November midterm elections in the U.S.—as reported yesterday by The New York Times. In addition, the surge in oil prices reflects traders’ concerns about the depletion of global reserves, the newspaper notes. All of this is taking place against the backdrop of intensified Iranian attacks on tankers passing through the Strait of Hormuz. On Thursday, Iranian state television reported that at least seven oil tankers had been attacked or struck by sea mines in the vicinity of this waterway.

“Oil prices continue to rise: everything points to the military escalation in the Middle East continuing in the near future. High-profile statements claiming that it will all ‘end soon’ are meaningless as long as active shelling continues,” noted Helima Croft, head of global commodities strategy at RBC Capital Markets (quoted in the FT).

In addition, the U.S. evacuated some of its diplomatic personnel and their families from Saudi Arabia this week in response to the increasing number of attacks on the kingdom by Iran-backed Houthis. This has further intensified pressure on oil markets: investors are concerned about the possible spread of the Middle East conflict to other countries in the region.

“Rising oil prices are taking over from concerns about credit risks and becoming the main threat to the rotation in the stock market—which is exactly what has kept the S&P 500 afloat until now,” — noted Bloomberg macro strategist Michael Ball.

Amid rising oil prices on October 23, U.S. stocks fell: the S&P 500 lost 0.44%, the Nasdaq Composite lost 0.09%, and the Dow Jones Industrial Average lost 1.23%.

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