Oil prices reached a six-month high on Friday as traders priced in risks tied to escalating fighting in the Middle East. Brent crude futures for December delivery settled at $116.72 per barrel, while West Texas Intermediate crude closed at $103.03 per barrel, marking the third consecutive week of gains for the international benchmark.
The surge in oil prices follows a series of regional developments, including attacks near the Red Sea and evacuations at Saudi Aramco’s headquarters in Dhahran, the first such measure since the Iran conflict began. The U.S. ordered nonessential embassy personnel to depart Saudi Arabia after a series of attacks on the country’s airports and oil fields. On Friday, the national average price of gasoline stood at $4.29 per gallon, approximately $1.22 higher than a year ago, while diesel hovered around $6.31 per gallon, about $2.68 higher than last year.
Regional Escalation and Military Posturing
The U.S. and Israel have reportedly drawn up plans for renewed military action against Iran, according to reporting from the New York Times. The potential strikes are framed as a response to Iran’s nuclear program and regional aggression, with the Strait of Hormuz remaining a focal point of tensions. President Trump has stated that the U.S. will not initiate attacks before the Nov. 3 midterm elections, though threats of retaliation against Iran have intensified in recent weeks.
Saudi Arabia has taken precautionary measures, including the evacuation of Aramco’s Dhahran headquarters and the postponement of high-profile international forums, such as the U.N. World Data Forum and the Future Investment Initiative, both rescheduled to 2027. The kingdom cited escalating regional tensions and Houthi attacks as reasons for the delays.
Diplomatic Responses and Economic Pressures
U.S. Ambassador to the United Nations Mike Waltz told the Financial Times that the conflict with Iran could extend for another year, emphasizing that the U.S. seeks Iran’s disposal of highly enriched uranium and a meaningful agreement on domestic enrichment before de-escalation. Waltz also asserted that the U.S. Navy could maintain its blockade on Iranian ports for the foreseeable future, while the administration continues to tighten economic pressure on Tehran.
Foreign ministers from seven nations, including the E3 group (Britain, France, Germany) and the newly formed R4 group (Turkey, Saudi Arabia, Pakistan, Egypt), are scheduled to meet in Istanbul on Friday to discuss the Strait of Hormuz crisis, broader Middle East conflicts, and the war in Ukraine. The talks aim to address regional stability amid rising military and economic pressures.
Fuel Price Pressures and Supply Concerns
The surge in oil prices has contributed to elevated fuel costs across the U.S., with the national average for gasoline at $4.29 per gallon—a $1.22 increase from last year—and diesel at $6.31 per gallon, up $2.68 from 2022. Analysts warn that a power outage at a refinery in the Chicago area could further drive up refined fuel prices in the Midwest, with projections of $5 per gallon gasoline in states such as Michigan, Ohio, Minnesota, Illinois, and Indiana.
Saudi Aramco, the world’s largest oil company, has not publicly detailed the reasons for the Dhahran evacuation beyond citing regional security concerns. The evacuations follow a series of attacks on Saudi infrastructure, including strikes on airports and oil fields, which have heightened fears of prolonged supply disruptions.