News24 | Oil price close to $110 after steepest weekly increase since July

The escalation of war in the Middle East has led to a 13% increase in the oil price this week.

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Oil prices rose on Friday and both major benchmarks are on track to end the week above $100 a barrel for the ‌first time since mid-May, as increasing attacks along key shipping routes in the Middle East fuel fears of a prolonged disruption to supplies.

Brent crude futures closed at $108.95 per barrel on Thursday, the highest closing since the $110.61 on 19 May. By 08:00 on Friday morning, it was trading at $105.42.

US West Texas Intermediate (WTI) crude rose to $103.17 a barrel.

Both benchmarks rose more than 6% on Thursday. On a weekly basis, the benchmarks were trading nearly 13% higher – the steepest gain since the week ended 17 July.

Iran-aligned Houthis seized control of Yemen’s port of Mocha on Thursday, ⁠posing a further threat to Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.

Attacks from Yemen on Saudi energy facilities marked an escalation beyond Iran and the Strait of Hormuz and raised fears of prolonged disruptions in the broader region, analysts say.

“While meaningful volumes are still moving through the Strait of Hormuz, flows remain well below pre‑war levels, underscoring how fragile the situation has become,” ING analysts said in a note.

Oil supply disruptions due to the US-Iran war, along with Ukrainian attacks on Russia’s refineries, pushed the US national average diesel price past $6 a gallon for the first time ever on Thursday, according to price tracker GasBuddy.

Still, US President Donald Trump has not shown any signs of easing attacks ‌on Iran. ⁠He warned the US may hit Iran’s Pickaxe Mountain near its heavily damaged Natanz uranium enrichment facility, but said he thought the war would end immediately after the November midterm elections.

Iran said it had attacked 10 ships near the Strait of Hormuz on Wednesday, after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.

“With events spiralling and Iran showing it is willing to stretch ⁠this conflict as wide and as long as it can, it is becoming increasingly likely that WTI crude will retest the $119.48 high from early March,” IG analyst Tony Sycamore said.

Analysts said the rally’s durability will hinge on China, the world’s largest crude importer. If China continues to buy, it could ⁠amplify the impact of supply disruptions and drive prices higher.

Organisation of the Petroleum Exporting Countries (OPEC) lowered its forecast for world oil demand growth in 2026 to 380 000 barrels per day, a copy of its monthly report showed, marking the fifth straight downward revision. OPEC oil output fell by 640 000 bpd in August, ⁠a Reuters survey found.

“The next leg in oil will depend less on headlines and more on whether physical flows improve or deteriorate further,” said Phillip Nova analyst Priyanka Sachdeva.

“The question now is whether the market can stabilise below $120, or whether another wave of supply disruption pushes crude into a completely new price regime.”

News24 reported on Thursday that local fuel prices are on course to reach new record highs in October due to the international oil price surge, compounded by pressure on refining capacity. Current underrecoveries – indicating increases – are between R1.65 and R2.05 per litre. The underrecoveries will keep changing daily along with changes in international fuel prices and the rand-dollar exchanger rate.

READ | Threat of record fuel prices this October

With updated oil price data added by News24, and additional information on the local fuel price expectation.