Oil prices continued to recover on Friday, November 6, as renewed attacks on tankers in the Middle East heightened concerns about the security of international energy shipments. Nevertheless, both major crude benchmarks remained on course for substantial weekly losses as investors weighed the possibility of diplomatic progress in the conflict involving the United States, Israel and Iran.
At 01:58 ET (06:58 GMT), January Brent crude futures advanced 1.7% to $99.98 per barrel, while US West Texas Intermediate (WTI) futures gained 1.3% to $91.67 per barrel.
The gains followed Thursday’s rebound, when Brent closed almost 4% higher and WTI rose 2.7%. Both benchmarks had plunged more than 8% on Wednesday, reaching their lowest closing levels since August 31.
Despite the recovery, Brent was heading for a weekly decline of more than 15%, while WTI was set to lose approximately 12%, reflecting the sharp change in market expectations following the US midterm elections.
Strait of Hormuz Security Concerns Drive Oil Market Recovery
Fresh incidents involving commercial vessels in the Persian Gulf have renewed concerns about the reliability of oil shipments through the Strait of Hormuz.
The waterway is a critical route for global energy transportation, making disruptions particularly significant for international crude markets.
According to the United Kingdom Maritime Trade Operations (UKMTO), at least five vessels have reported security incidents since Sunday.
The latest reports have brought the pace of attacks closer to October’s elevated level, when 35 incidents involving ships were recorded.
Iran’s Islamic Revolutionary Guard Corps said two oil tankers and a tugboat caught fire in separate incidents after attempting to travel through routes in the Strait of Hormuz that Iranian authorities considered unauthorised.
The developments reinforced concerns that maritime disruptions could continue even if diplomatic discussions make progress.
For oil traders, uncertainty about the safety of tanker movements remains an important factor in assessing the availability and reliability of international crude supplies.
Saudi Oil Export Infrastructure Faces Additional Threats
Security concerns extended beyond the Persian Gulf as Saudi Arabia warned of potential dangers near Yanbu, a major oil export centre on its Red Sea coastline.
The warning followed continued attacks against the kingdom by Yemen’s Houthi militants, who are aligned with Iran.
Yanbu plays an important role in Saudi Arabia’s oil export infrastructure, providing access to shipping routes through the Red Sea.
Potential threats to the facility or surrounding maritime routes could create additional complications for regional energy transportation.
The combination of security incidents in the Strait of Hormuz and warnings near Yanbu has reinforced concerns about the vulnerability of key Middle Eastern export routes.
Although crude prices remained significantly lower over the week, these developments helped support Friday’s recovery.
US Election Results Trigger Sharp Reassessment of Geopolitical Risk
The week’s substantial decline in oil prices followed the US midterm elections, which saw Democrats gain control of both chambers of Congress from President Donald Trump’s Republican Party.
The outcome initially strengthened expectations that increased political scrutiny in Washington could encourage renewed diplomatic efforts to end the conflict involving the United States, Israel and Iran.
Investors responded by reducing the geopolitical risk premium incorporated into crude prices, contributing to Wednesday’s steep decline.
However, the subsequent rebound suggested growing doubts about whether the election results would produce an immediate diplomatic breakthrough.
A change in congressional control does not necessarily guarantee a rapid reduction in hostilities or the restoration of dependable oil shipments through the Strait of Hormuz.
Continued attacks on commercial vessels have added to uncertainty about the timetable for any meaningful improvement in regional security.
Iran Holds Regional Diplomatic Discussions
Diplomatic communication remained active despite the continuing military tensions.
Iranian Foreign Minister Abbas Araqchi held separate telephone discussions with officials in Saudi Arabia and Qatar.
The conversations addressed recent efforts to improve regional stability and maintain diplomatic engagement.
The contacts suggested that channels for dialogue remained open among important regional governments.
Nevertheless, significant uncertainty remained about whether diplomatic initiatives could produce a lasting settlement.
For energy markets, any agreement would need to reduce the risk of further attacks and improve confidence in the security of major oil transportation routes.
Until such progress becomes clearer, traders are likely to remain sensitive to developments affecting both military activity and diplomatic negotiations.
Ukrainian Attacks on Russian Refineries Add Supply Uncertainty
Oil market risks were also influenced by renewed Ukrainian attacks on Russian energy infrastructure.
Russia’s Ryazan oil refinery, one of the country’s largest processing facilities, appeared to have been targeted in an overnight drone operation.
Reuters reported that its analysis of video footage suggested the refinery had been targeted.
The available information did not establish the extent of any damage or whether refinery operations had been disrupted.
Nevertheless, attacks against major oil processing facilities can raise concerns about fuel production and the stability of petroleum supply chains.
The latest incident added another geopolitical consideration for traders already monitoring shipping disruptions and regional tensions in the Middle East.
Oil Prices Remain Vulnerable to Political and Supply Developments
The sharp movements in crude prices this week have highlighted the competing influences of diplomatic expectations and physical supply risks.
The prospect of renewed negotiations following the US elections contributed to a substantial decline in prices, while fresh attacks on tankers and regional infrastructure subsequently encouraged buying.
Brent’s anticipated weekly loss of more than 15% and WTI’s projected decline of approximately 12% underline the extent of the recent volatility.
Investors will continue to assess the security of shipments through the Strait of Hormuz, developments near Saudi Arabia’s Red Sea export facilities and diplomatic contacts involving Iran.
Attacks on Russian refining infrastructure will also remain a potential source of uncertainty.
The near-term direction of crude prices will depend largely on whether diplomatic initiatives reduce geopolitical tensions or further security incidents sustain concerns about disruptions to global oil supplies.
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