Oil Surges Past $117 as Middle East Attacks Threaten Global Energy Supplies

Oil prices have climbed above $117 per barrel as escalating Middle East tensions and attacks on Saudi energy infrastructure raise fears of supply disruptions across the region. European natural gas prices simultaneously broke through the €100 per megawatt-hour threshold, marking the first time in nearly four years that costs have reached this level.

Brent crude, the international benchmark, jumped above $117 a barrel for the first time since April as investors worried about a possible new outbreak of hostilities with Iran [269486]. The increase follows a series of attacks by Yemen's Houthi rebels on Saudi targets, including a ballistic missile fired at Riyadh that Saudi Arabia intercepted on Friday [269258].

The Houthis claimed attacks on Saudi Arabia's Defense Ministry, state oil company Aramco facilities, and the international airports in Abha and Dammam, where two people died [269258]. The attacks have raised concerns about possible supply disruptions across the Middle East, pushing Brent toward its third consecutive weekly gain [268877].

Iran's Revolutionary Guard said it attacked four vessels it claimed were illegally transferring oil in the Persian Gulf [269258]. US President Donald Trump accused Iran of spreading false reports about attacks in the Strait of Hormuz to push up fuel prices, saying more oil now flows through the strategic waterway than before the conflict [269258].

US media reported that Washington and Israel are considering a new offensive against Iran after the US legislative elections on November 3 [269258]. The attacks have led the US to order the departure of non-essential government personnel and their families from the region [269258].

The energy price surge is feeding through to inflation expectations in the United States. Higher oil costs can raise prices across the economy, which may keep inflation elevated [269486]. Federal Reserve Chair Kevin Warsh warned that inflation remains too high as energy prices climb, signaling continued concern over price pressures [273647].

In Europe, natural gas prices have climbed above €100 per megawatt hour for the first time since 2022 as winter approaches [273567]. The European Union says it is not worried about supplies, but storage facilities are only 72% full. The EU warns households to expect a "difficult" season ahead [273567]. In the UK, the government is working to soften the impact of high energy bills on households [273567].

The oil price surge has also rattled currency markets. A double blow of artificial intelligence stock euphoria and rising oil prices is straining Asian currencies from Taiwan to the Philippines, as investors shift money into AI-related assets while costly oil imports weigh on economies across the region [272719].

The Canadian dollar strengthened on Friday, supported by rising oil prices and growing expectations that the Bank of Canada will raise interest rates [268863]. Oil is one of Canada's largest exports, and firmer crude prices lifted demand for the currency tied to it [268863].

Airlines are feeling the squeeze from higher fuel costs. JetBlue Airways' creditors are working with restructuring adviser PJT Partners as a surge in jet fuel expenses driven by the Iran war has squeezed margins for US carriers [270977]. Carriers have raised airfares and still see steady demand for air travel, but those gains have not offset the higher fuel costs [270977].

Spain's IBEX 35 stock index opened slightly higher Friday, up 0.22% to 18,956.3 points, despite pressure from rising oil prices. The index has gained 9.48% this year [269258].