Oil prices rose sharply last week as traders priced in the risk of renewed US military action against Iran and continuing attacks on Saudi energy infrastructure.
Brent crude rose 2.7 per cent to $116.20 a barrel by 13:50 GMT on Friday, 23 October, according to Anadolu Agency, while West Texas Intermediate rose 3 per cent to $102.50. Brent was up about 5 per cent over the week and WTI about 3 per cent, putting both on course for a third consecutive weekly gain.
Strike risk
The rally followed remarks by President Donald Trump on Thursday that the US could carry out further strikes on Iran. "We've knocked the hell out of them, and we may do it a little bit further," he said. US and Israeli officials have reportedly drawn up plans for renewed strikes after the US midterm elections on 3 November.
The war that began with US and Israeli strikes on Iran in late February remains unresolved despite a ceasefire and a memorandum towards a final peace deal, with navigation through the Strait of Hormuz the main sticking point. Houthi missile and drone attacks on Saudi airports and oil facilities this month have added to concerns about supply.
Washington's response
The administration has turned to a series of measures to ease fuel prices. On 22 October, Mr Trump invoked the Defense Production Act to declare petroleum production, refining and related activities essential to national defence, allowing federal financial support for projects. The Department of Energy is also seeking proposals for an exchange of up to 17 million barrels from the Strategic Petroleum Reserve. US diesel averaged $6.32 a gallon on 23 October, according to AAA.