The price of Brent crude oil reached $114 per barrel intraday on Friday, a level the commodity last closed at on May 4, when it settled at $114.44 per barrel. Commenting on oil hitting $114, Tamas Varga, an analyst at PVM Oil Associates, which is part of TP ICAP, noted in a statement sent to Rigzone that “there are visible doubts that the proposed trilateral meeting of the U.S./China/Russia will bring potential peace in Ukraine within reach”, and warned that “reciprocal attacks on energy infrastructure are expected to continue”. “In the Middle East, renewed strikes on vessels in the Strait of Hormuz… [and a] persistent Houthi threat on Saudi oil installations in the Red Sea more than offset the alleged rise of oil exports out of the region,” Varga added. “Perhaps more importantly, reports of a potential short but intense attack by the U.S. and Israel on Iran, alongside indications from the U.S. ambassador to the UN that his country might still be involved in the conflict with Iran a year from now, make investors believe that peace in the Persian Gulf remains more elusive than before,” Varga warned. In an oil market report analysts at ABG Sundal Collier, including Ole Hvalbye, highlighted that Brent was trading at a “strong ~$114.5 per barrel this morning, up from $105 per barrel last Friday (+$9.5 per barrel week on week)”. They noted that the escalation onshore continues, highlighting that Aramco “ordered a full evacuation of its Dhahran HQ yesterday, the first since the conflict resumed in July”. They added that the U.S. “has now ordered the majority (non-essential) of embassy staff + families out of Saudi Arabia (similar approach in UAE, Qatar, Bahrain, and Jordan)”. The analysts went on to state that a “key market driver” is that the Houthis “are continuing to push towards Bab el-Mandeb”. “Yanbu/Red Sea, at the end of the East-West pipeline, is Saudi’s ‘lifeline’ around SoH. i.e., the ‘alternative’ outlet is now at increasing risk, which push up prices at the front of the curve,” they said. The analysts concluded in the report that there are “increased risks left, right, and center in the entire Middle East”, but added that crude is, “for now, ‘technically available’”. They warned, however, that both the Strait of Hormuz and the Red Sea bypass are “under increasing threat (nothing new you might think- correct! But far from optimal)”. “On top of that, there’s talk of a U..S/Israeli strike on Iran after the 3 Nov midterms. With this in mind, the front end definitely stays bid (as we see in the market), even though surplus is lurking under the surface,” the analysts continued. Naeem Aslam, CIO at Zaye Capital Markets (ZCM), highlighted that oil prices “remained elevated” on Friday. “The market is experiencing heightened volatility as geopolitical tensions increasingly outweigh concerns about weakening global economic activity,” Aslam said in the analysis. “At Zaye Capital Markets, we observe that President Trump’s declaration that the United States is not negotiating with Iran, combined with his warning that developments could unfold relatively soon, has increased uncertainty surrounding future military action and the security of Middle Eastern energy infrastructure,” he warned. “Renewed attacks on Saudi Arabian facilities, including infrastructure associated with its energy industry, have intensified concerns about production interruptions and shipping disruptions,” he added. “Reports of further tanker incidents in the Strait of Hormuz have also increased the risk premium embedded in crude prices,” he continued. “These developments help explain Thursday’s approximately four percent oil rally to five-month highs, followed by more cautious trading on Friday as investors reassessed the likelihood of immediate supply losses,” he went on to state. Aslam noted in the analysis that the distinction between actual production disruptions and geopolitical risk remains particularly important. “Although crude exports from the Persian Gulf have recovered substantially, shipping costs, insurance premiums, refinery disruptions, and continuing threats to regional infrastructure are preventing a sustained normalization of energy prices,” he said. “We believe Brent’s ability to remain above $110 will depend primarily on developments involving Iran, Saudi energy infrastructure, tanker security, and the pace of global inventory depletion,” Aslam highlighted. “A further deterioration in Middle Eastern security could expose the $120 per barrel region, while credible diplomatic progress, improving shipping conditions, or evidence of weakening fuel demand could encourage a retreat toward $105-$110,” he said. “At Zaye Capital Markets, we maintain that supply security and actual energy flows, rather than geopolitical statements alone, will determine whether the current rally develops into a more prolonged period of elevated oil prices,” he went on to state. Rystad Energy stated that, with U.S. midterm elections less than three weeks away, “elevated energy prices have become a central economic and political variable”. “Houthi attacks on Saudi infrastructure, renewed Iranian strikes on commercial shipping in the Strait of Hormuz, and the collapse of the Russia-Ukraine energy truce are sustaining a geopolitical risk premium across crude and product markets,” Rystad said.