Oil prices rose on Friday as concerns that the United States could resume strikes on Iran added fresh risks to Middle East supply.
The December Brent crude futures contract, which expired on Friday, settled near $118 a barrel, while the more actively traded January contract closed around $113. That marked the fourth consecutive monthly gain for the global benchmark. The U.S. benchmark WTI crude settled above $104 a barrel.
Traders have begun preparing for a possible escalation as U.S. President Donald Trump repeatedly threatened to restart airstrikes on Iran after next week's midterm elections. According to media reports, a senior commander briefed Trump on military options on Thursday. So far, diplomatic efforts have failed to calm the conflict in the Persian Gulf and the Strait of Hormuz.
Although regional efforts to restart negotiations reportedly continued on Friday, senior Iranian officials have signaled that Tehran will not compromise on its position to end the war. Low inventories and tight refined product supply have also supported oil prices. European diesel futures edged higher after reports that Ukrainian forces struck a refinery in Russia's Samara region following a pause of about two weeks. Meanwhile, Russian forces also launched attacks on Ukrainian targets.
As they assess the direction of the war, traders are watching next week's U.S. midterm elections. National polling ahead of the vote shows the U.S. government's handling of the Iran war is unpopular, with many voters dissatisfied over rising living costs. Strategists Daniel Hynes and Soni Kumari of Australia and New Zealand Banking Group said in a report that the election "will be the next important geopolitical catalyst for the oil market." They added that "the possibility of renewed hostilities after the vote heightens uncertainty in an already fragile physical market."
At settlement, WTI crude for December delivery rose 2.1% to $104.12 a barrel. December Brent crude rose 2.4% to settle at $117.64 a barrel. The January contract rose 2.4% to close at $113.43 a barrel. In post-settlement trading, WTI trimmed its gains after Trump said peace talks were underway and added that "frankly, we still have time"; the January Brent contract also pulled back.
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