Brent crude tops $117 as Iran targets Gulf data hubs

Brent crude oil settled above $116 per barrel on Friday, capping a trading session that saw prices climb to $117. The benchmark price for global oil markets rose by more than 2.7% during the day, marking its highest level since April. The surge followed new threats from Tehran regarding potential military targets in the Gulf.

Iranian officials stated that if the United States and Israel launch a new joint offensive, Iran will retaliate against specific infrastructure. The named targets include oil facilities, undersea cables, data centers, and artificial intelligence systems located in the Gulf region. These announcements followed widespread reports that Washington is considering renewed military strikes on Iran, potentially timed for after the US midterm elections.

Richard Hunter, a broker at Interactive Investor, said the shift toward a potential military action was enough to spike prices. He noted that the conflict, which many initially viewed as a short engagement, is now entering its eighth month. The current price level is part of a longer trend of volatility. In February, before the war began, Brent crude traded at approximately $72 per barrel. By the end of April, tensions had pushed the price to $126.

Tensions in the region have intensified this week. The Islamic Revolutionary Guards Corps claimed on Wednesday that it struck four commercial ships in the Strait of Hormuz. This waterway serves as a key chokepoint for global oil shipments. Susannah Streeter, chief investment strategist at Wealth Club, said the journey across the strait remains dangerous due to projectiles fired at maritime traffic. She added that fears are growing that American and Israeli forces may target Iran's energy infrastructure after the November 3 elections.

The US State Department ordered some diplomats and the families of US government employees to leave Saudi Arabia. The kingdom has faced continued attacks from Houthi rebels based in Yemen, adding another layer of instability to the region. Streeter pointed out that these attacks on Saudi facilities have intensified in the past week.

Other global factors are also affecting supply. Streeter noted that Ukraine's bombardment of Russian diesel refineries is impacting global energy supplies. This additional pressure on supply chains is complicating the market environment alongside the Middle East conflict.