Oil prices climbed to their highest level in five months this week as attacks on tankers near the Strait of Hormuz multiplied and Ukraine widened its campaign against Russian refineries, adding a fresh geopolitical premium to crude just as winter demand approaches. Brent crude futures touched $110 a barrel intraday Friday, their highest level since May, before settling up 3.72% at $109.86. West Texas Intermediate settled 3.51% higher at $101.41.
The latest leg higher followed a string of incidents in the Gulf. The UK Maritime Trade Operations agency recorded four more attacks on commercial vessels in the strait on October 11, and Iran claimed to have struck a very large crude carrier operated by ADNOC Logistics & Services. By some counts, at least 18 attacks on ships transiting the strait have been reported since the start of October, and Iran's Revolutionary Guard Corps has signaled it intends to extend its enforcement of what it calls compliance rules to waters beyond the strait itself.
Insurers retreat, Kyiv widens its target list
The intensifying attacks have pushed war-risk insurance costs sharply higher. Underwriters are now charging roughly 5% of a vessel's value to cover transits through the strait, up from about 2% to 3% just months ago, according to Baird Maritime's review of the war-risk market. Some underwriters have told shipowners to pause Hormuz voyages altogether, and shipping data provider Kpler found that only seven commodity vessels crossed the strait on October 6, the lowest daily count since late July — a sign that some operators are already rerouting or standing down rather than pay the higher premiums.
Ukraine has added to the pressure on the supply side from the other direction. Kyiv's forces struck the Gazprom Neftekhim Salavat refinery complex in Russia's Bashkortostan region on October 8, part of a campaign President Volodymyr Zelensky has pledged to intensify against the refineries that fund Moscow's war effort, according to Meduza's reporting on the strike. The combined effect of attacks on both Iranian-adjacent shipping lanes and Russian refining capacity has traders pricing in a tighter near-term supply picture than seemed likely just a month ago.
Analysts remain divided on how much spare capacity OPEC+ could bring to bear if the disruption worsens. Saudi Arabia and the United Arab Emirates hold the bulk of the group's unused production, estimated at a combined 2 million to 3 million barrels a day, but that capacity sits inside the same Gulf region now facing the shipping disruptions, limiting how much it could realistically offset a serious supply shock. The volatility has fed directly into equity markets, where energy-sensitive and inflation-wary investors have cited rising crude as one factor behind this week's broader stock pullback.
