Brent crude settles at $116 after Tehran lists Gulf digital hubs as strike targets

Global energy markets closed at their highest point in six months on Friday.

Brent crude, the international benchmark for oil pricing, rose by approximately 3.5 percent during trading. The price briefly surpassed $117 per barrel before pulling back slightly. It settled at just over $116 per barrel, a gain of more than 2.7 percent from the previous close. This level marks the highest price recorded since April.

The surge followed specific warnings from Tehran regarding retaliation. Iranian officials stated that if a new joint US-Israeli offensive began, they would target oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf region. The statements coincided with widespread reports that the United States is considering renewed military strikes on Iran. These plans appear timed for after the November 3 midterm elections.

Richard Hunter, a broker at Interactive Investor, attributed the price spike to this shift in strategy. He noted that the conflict, which many initially viewed as brief, has now entered its eighth month. Susannah Streeter, chief investment strategist at Wealth Club, warned that fears are mounting regarding potential targets for American and Israeli forces. She emphasized that the threat to digital infrastructure adds a new layer of risk to the region's energy assets.

Physical tensions in the region escalated earlier in the week. The Islamic Revolutionary Guards Corps claimed to have struck four commercial ships in the Strait of Hormuz on Wednesday. The strait serves as a critical chokepoint for global oil shipments. Streeter observed that the journey for ships crossing the strait remains dangerous due to projectiles being fired at maritime traffic. Additionally, Houthi rebels based in Yemen have intensified attacks on Saudi Arabian facilities.

The US State Department responded to the instability by ordering some diplomats and the families of US government employees to leave Saudi Arabia. Supply concerns are also driven by factors outside the Middle East. Streeter pointed out that Ukraine’s bombardment of Russian diesel refineries is impacting global supply chains. These combined pressures have kept costs elevated for consumers and businesses worldwide.