U.S. crude settles above $100 and Brent touches $110 as attacks on ships near Hormuz mount

U.S. crude oil settled above $100 a barrel on Friday and Brent briefly reached $110, as attacks on ships near the Strait of Hormuz piled up, Ukraine resumed strikes on Russian refineries and U.S. stockpiles fell sharply.

Where prices settled

West Texas Intermediate crude for November delivery settled at $101.41 a barrel on the New York Mercantile Exchange on Friday, up $3.44, or 3.5%. Brent crude for December delivery, the international benchmark, settled at $109.86, up $3.94, or 3.7%, after touching $110 during the session for the first time since May.

Both benchmarks finished the week higher. The November WTI contract settled at $91.85 a week earlier, so Friday's close leaves it up about 10% over five sessions. December Brent rose about 5% from its $104.72 settlement on Oct. 9.

The $100 mark comes with a caveat: it applies to the November contract. December WTI was trading near $98.98 at 3:08 p.m. ET, after Friday's settlement, below the round number. Brent, the benchmark for seaborne crude traded around the world, ended about $8.45 above November WTI.

Ships under fire near Hormuz

At least nine commercial ships have been attacked in or near the Strait of Hormuz since Sunday, CNBC reported, and the International Maritime Organization has counted three seafarers injured and two missing this week. Iran has said it is stepping up strikes in response to the U.S. blockade of its ports and sanctions imposed last month, according to Reuters.

Singapore's Maritime and Port Authority said two Singapore-registered container ships, the GFS Pride and the GFS Giselle, were struck by unknown projectiles while transiting the strait on Oct. 13 and Oct. 14, Singapore time. The GFS Pride caught fire and sank; all 21 crew members were evacuated without injuries. The GFS Giselle took hull damage and reached a safe anchorage under its own power.

On Thursday, U.S. Central Command disputed Iran's account that the GFS Pride hit a naval mine, saying the ship was struck by a projectile fired by Iran's Islamic Revolutionary Guard Corps and sank while being towed toward shore. Central Command also said more than 40 commercial vessels had moved through the strait in the previous 24 hours.

Traffic is still moving, but less of it. Crude exports through Hormuz averaged 9.4 million barrels a day in the week ended Wednesday, about 70% of the pre-war average, according to Kpler data cited by CNBC. Kpler analysts wrote on Thursday that intensified Iranian attacks "drove Gulf crude flows sharply lower" and said they expect a slower and more uneven recovery without a comprehensive political deal.

Russia's refineries are targets again

The other pressure point is Russia. Ukrainian President Volodymyr Zelenskiy said Kyiv was abandoning a ceasefire on energy sites that President Donald Trump had announced, after Russia kept hitting Ukrainian infrastructure. Ukraine struck a Russian refinery on Thursday, and the Ryazan refinery suspended a primary crude distillation unit after a drone attack, two industry sources told Reuters.

That matters most for diesel, a fuel whose supply has already tightened this year. The U.S. average price of diesel was $6.326 a gallon on Friday, up from $3.649 a year earlier, according to AAA. Regular gasoline averaged $4.327, compared with $3.057 a year ago.

"Conflict in the Middle East still keeps coming back and I think it's questionable how much diesel fuel Russia can actually deliver to the markets," Dennis Kissler, senior vice president of trading at BOK Financial, told Reuters.

A tighter U.S. market, too

U.S. supply has also tightened. Commercial crude inventories, which exclude the Strategic Petroleum Reserve, fell by about 8.6 million barrels to 415.6 million barrels in the week ended Oct. 9, according to Energy Information Administration data released Thursday. CNBC tied the drop to production shut-ins along the Gulf Coast from Hurricane Isaias.

Analysts at ING said in a Friday note that the market is pricing in a significant risk premium for the Strait of Hormuz. "In order to see a full removal, there needs to be some kind of agreement between the US and Iran," Warren Patterson and Ewa Manthey wrote, according to Investing.com.

Exports through the strait had touched pre-war levels in September, before this month's attacks pushed them back down, according to CNBC's account of the Kpler data.