Tehran's Threats to Gulf Data Hubs Push Brent Above $116

Brent crude, the international benchmark for oil pricing, rose 3.5 percent on Friday to close just above $116 per barrel. The price briefly crossed the $117 mark during the trading session, marking the highest level seen since April. The gain represented an increase of more than 2.7 percent from the previous day's closing price.

The market move followed remarks from Iranian officials regarding potential retaliation targets. Tehran stated that if the United States and Israel launched a new joint offensive, Iran would strike oil facilities, undersea cables, data centers, and artificial intelligence infrastructure in the Gulf region. This specific inclusion of digital assets signaled a widening of the conflict's economic impact beyond traditional energy infrastructure.

Traders reacted to reports that Washington is weighing renewed military action against Iran. Such a move is reportedly scheduled for the period after the US midterm elections on November 3. Richard Hunter, a broker at Interactive Investor, stated that this shift from diplomacy to potential kinetic action was enough to drive prices higher. He noted that the conflict, which many expected to be brief, has now entered its eighth month.

The current price level reflects a sustained period of high energy costs. In February, before the war began, Brent crude traded near $72 per barrel. By late April, prices had peaked at $126 per barrel. The recent surge indicates that the market remains sensitive to geopolitical risk despite the slight retreat from the April high.

Regional tensions intensified earlier in the week when the Islamic Revolutionary Guards Corps claimed strikes on four commercial ships in the Strait of Hormuz. The strait is a critical chokepoint for global oil shipments. In response to the instability, the US State Department ordered some diplomats and employees' families to leave Saudi Arabia. The US also cited continued Houthi attacks on the kingdom as a factor in the advisory.

Susannah Streeter, chief investment strategist at Wealth Club, said fears are growing that US and Israeli forces may target Iran's energy infrastructure after the November 3 elections. She pointed out that Houthi attacks on Saudi facilities have intensified this week. Streeter also noted that projectiles continue to be fired at maritime traffic in the Strait of Hormuz. Additionally, she mentioned that Ukraine's bombardment of Russian diesel refineries is adding further pressure to global supply chains.