Oil prices jumped by more than 3 per cent on Friday, with Brent touching $110 for the first time since May, as lingering concerns over the Middle East conflict stoked supply worries.
Brent, the benchmark for two thirds of the world's oil, gained 3.72 per cent to settle at 109.86 a barrel, which was its highest close since mid-May. West Texas Intermediate, which tracks US crude, rose 3.55 per cent to hit $101.41, the first time it has topped $100 in nearly a month.
For the week, Brent gained nearly 5 per cent, while WTI jumped by more than 10 per cent. Both traded lower earlier in the session.
Global energy prices remain volatile and elevated as the war in Iran, now in its eighth month, continues to choke energy supplies. Attacks by Yemen's Houthi rebels on Saudi Arabia have also added to concerns.
Those have prompted moves to ensure ample supplies globally. The International Energy Agency on Thursday said it had agreed to release more than 20 million barrels to the market amid a surge in diesel prices.
The IEA said wholesale diesel surpassed $200 in Singapore and hit roughly $220 in Europe and the US. The average US diesel price at the pump was $6.32 a gallon on Friday, compared to last week's average of $6.27 a gallon.
The Paris-based agency also pointed out that exports out of the Middle East have recovered to pre-crisis levels and that oil storage globally is not tight.
Gulf oil producers, meanwhile, have pushed tanker transfers as far as India’s coast and slashed prices to keep crude flowing to Asia, as the makeshift export network around the Strait of Hormuz buckles under congestion and persistent attacks.
There were 82 ship-to-ship transfers in India's Gulf of Kutch last month, equivalent to about 680,000 barrels per day, shipping analytics company Vortexa said. Refined products accounted for about 65 per cent of the volume, with crude making up the remainder.
Current oil market levels “still seem to be somewhat lofty compared to market realities … [but] we are not running out of oil, as flows out of the Middle East have largely recovered,” said Norbert Rucker, head of economics and next-generation research at Swiss lender Julius Baer.
“Instead of tilting the oil market into a deficit, the Iran war has mainly erased the surplus that had been built in 2025.”
G7 leaders pledged this month to accelerate the IEA's co-ordinated emergency stock release by releasing 100 million barrels of diesel and other reserves to help stabilise markets.
And in a surprise move last week, US President Donald Trump's administration lifted sanctions to enable Russia to supply millions of barrels of diesel to global markets.
Ukrainian strikes against Russian refineries continued on Thursday after Moscow was accused of violating President Trump's ceasefire on targeting energy sites last week. Russia's Ryazan oil refinery suspended operations at one of its crude distillation units following a drone attack, Reuters reported.
The IEA on Wednesday warned that the global diesel shortage triggered by the Iran war was set to persist well into next year, with depleted inventories not expected to recover until the second half of 2027.
Gold, meanwhile, posted a weekly loss as investors sought clues from the US Federal Reserve on more interest rate increases. The precious metal, which is regarded as a safe haven asset, added 0.40 per cent to 4,165.58 an ounce. Silver was flat at $57 an ounce.
