Oil prices have surged back into triple digits. US benchmark West Texas Intermediate settled at $101.41 a barrel on Friday, October 16, up more than 10% for the week, while Brent crude settled at $109.86 after briefly touching $110 — its highest level since May.
Last week in numbers
- WTI: $101.41, up $9.56 (+10.4%) on the week
- Brent: $109.86, up $5.14 (+4.9%) on the week
- US crude stocks: down 8.6 million barrels to 415.6 million
What drove the surge
Several supply shocks hit at once. In the Middle East, a Saudi-led coalition intercepted a ballistic missile aimed at the Red Sea port of Yanbu, a key outlet for Saudi exports that bypasses the Strait of Hormuz, where attacks on shipping have already reduced crude flows. In Russia, Ukrainian strikes damaged the Ryazan refinery and shut a primary crude unit, raising questions about Russian diesel exports. And in the United States, inventories fell far more than expected, partly because of hurricane disruptions.
Why diesel matters most
Diesel shortages have been a particular source of strength in the market. Diesel powers trucks, trains, ships and farm equipment, so higher prices ripple through supply chains and eventually show up in the cost of food and goods. The US national average for diesel hit a record in late September.
An oil shock is ultimately an inflation shock — and central banks are already reacting.
Emergency supplies cushion the blow
Gains would likely have been larger without emergency measures. The International Energy Agency has coordinated releases of more than 20 million barrels from member stockpiles, and the US has offered up to 17 million barrels through Strategic Petroleum Reserve exchanges.
The economic impact
- Inflation: US consumer prices rose 3.7% in September, driven by gasoline.
- Interest rates: Markets see a meaningful chance of another Fed hike on October 27–28.
- Growth: The IMF projects global growth slowing to 3.1% this year as energy costs bite.
- Importing nations: Countries in South Asia and Africa face pressure on currencies and budgets.
What could bring prices down
The single biggest factor is the Strait of Hormuz. Any agreement that restores safe passage for tankers would likely send prices sharply lower. Until then, traders expect volatility to remain high. Follow our Business coverage for updates.