Brent crude settles above $116 as Iran lists Gulf data centers for strike

Oil markets have absorbed the cost of a prolonged Middle East conflict, with Brent crude reaching its highest level since April. The price of the international benchmark surged by roughly 3.5 percent on Friday, climbing past $117 per barrel before settling at just over $116. This close marked an increase of more than 2.7 percent from the previous day's level.

The spike followed new declarations from Iranian officials regarding potential targets for retaliation. Tehran stated that if the United States and Israel launch a new joint offensive, Iran would strike oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf region. This specific targeting of technology hubs added a new layer of risk to the global energy calculation.

Market participants linked the price jump to reports that Washington is planning renewed military strikes on Iran. These plans appear to be timed for the period following the US midterm elections. Richard Hunter, a broker at Interactive Investor, observed that this shift from diplomacy to potential action was enough to trigger the recent price surge. He noted that what many initially viewed as a brief conflict is now entering its eighth month.

The cost of energy has risen sharply since the war began. In February, before hostilities started, Brent crude traded at approximately $72 per barrel. By the end of April, tensions had pushed the price to $126. The current level reflects a sustained period of elevated costs for businesses and consumers.

Physical risks in the region increased during the current week. The Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz on Wednesday. This chokepoint is vital for global oil shipments, and recent incidents have made navigation more dangerous for commercial vessels. Susannah Streeter, chief investment strategist at Wealth Club, added that projectiles are still being fired at maritime traffic in the strait.

The US State Department responded to the instability by ordering 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. Streeter noted that these Houthi attacks have intensified this week, complicating the security situation for American personnel in the region.

Global supply concerns extend beyond the Middle East. Streeter pointed to Ukraine’s bombardment of Russian diesel refineries as another factor impacting the energy market. This additional pressure on supply chains contributes to the volatility seen in oil prices. Investors now face a complex landscape where regional military actions and distant industrial conflicts both influence the cost of crude.